Dubai is still very much in a supply cycle, which has been expected for some time, and potentially, will not level out until Q2 of 2022. This was a pretty safe prediction but with the freeze of incoming ‘new’ residents we are now left with allot of uncertainty in all areas of our lives. When any type of change occurs, we need to adapt and push forward, not stand still and wait.
A large percent of buyers worldwide have reported that they are halting their search, a recent OJO Labs survey in the US said, 80% of would-be-buyers have either delayed their housing search or stopped it all together. The reasoning behind this is pretty unsurprising, 60% cited concerns over their future employment prospects and 54% talked about the inability to see homes in person as a main driver for their hesitance to buy.
For the remaining 20% of buyers are expediting their search to take advantage of low interest rates and the potential of a good deal. Buyers requirements have changed also, with wants replaced with ‘needs’ such as, home office/study, good lighting, open floor plan and extra bedroom.
As previously reported we are seeing the same in Dubai, both tenants and buyers priorities have changed whilst searching for their new home. Tenants who are in apartments are shifting to villas for outside space which is made more affordable with new villa supply and lower rents.
The short term leasing market has taken the largest hit in the last couple of months with travel restrictions halting any new residents or tourist arriving. Many are trying to now lease on the long term market which has brought an influx of furnished properties to the market. With no new residents arriving in the near future, most people shifting within Dubai already have furniture. If you are a Landlord in this situation please reply to this email and I will give you a solution for the meantime.
I have noticed a high demand for not only new properties but also, upgraded properties. We leased a 3 bedroom in Jumeirah Village Triangle last week that was originally a 2 bedroom, we had 4 firm offers of 1 payment between 110-115k per annum. The same happened with a Springs villa, most are going for 85-90k but one villa which had wooden flooring, new kitchen cupboards and bathrooms went for over 100k, in only a week of being on the market. Making changes to your existing properties really does make a difference, we are in a tenant’s market, my landlords may not of gotten back what they spent back immediately in rent but they did if you combine the income with the average void periods for such a property.
Numbers…
Residential Sales:
March 2020 Secondary Market: 974 and 346 villa sales
March 2020 Off Plan Market: 1,311 and 176 villa sales
April 2020 Secondary Market: 264 apartments and 163 villa sales
April 2020 Off Plan Market: 1,102 apartments and 190 villas sales
1-18th May 2020 – Secondary Market: 200 apartment and 28 villa sales
1-18th May 2020 – Off Plan: 88 apartment and 43 villa sales
Areas With the Most Sales;
Apartments Secondary Market
1 – Palm Jumeirah, 2 – Dubai Marina, 3 – Downtown Burj Khalifa, 4 – Town Square, 5 – Bluewater Island
Villa/Townhouses Secondary Market
1 – Mudon, 2 – Villanova, 3 – Dubai Hills Estate, 4 – Arabian Ranches, 5 – Serena
Apartments Off Plan Market
1 – Dubai Creek Harboor, 2 – Madinat Jumeirah Living, 3 – Jumeirah Village Circle, 4 – Jumeirah Beach Residence, 5 – Mohammed Bin Rashid City
Villa/Townhouse Off Plan Market
1 – Villanova, 2 – Serena, 3 – Dubai South (Dubai World Central, 4 – La Mer, 5 – Arabian Ranches 3
Migration Tenant Flow – March 2020:
42,016 move in requests for DEWA connection and 33,211 move out requests, a positive of 8,805
Al Furjan, Discovery Gardens had a -2,615 leave, JVC had an addition 1,239 tenants move to the area, Business Bay also saw an increase of 1,356 tenants, whilst the Marina only had 289 additional moves ins to the area opposed to move outs.
Developer’s Market Share in May 2020
1 – Sobha Group – 19% AED1,610 psf average sales
2 – Meydan Group – 17,6% AED1,664 psf average sales
3 – Emaar – 15.6% AED1,137 psf average sales
4 – Damac Properties – 5% AED1,229 psf sales
Laura Victoria Adams
Wishing you and your family EID Mubarak
Date collated from propertymonitor, Forbes, OJO Labs and Urban