Dubai’s property market seems to be experiencing a resurgence as witnessed by the increased number of transactions in the first two months of 2019. Developers are reporting good numbers, despite oversupply in the market, as lower prices attract new buyers.
Majida Ali Rashid, Assistant Director General of Dubai Land Department (DLD) said, “In the first two months of 2019, there was an increase in the number of transactions. Today, there are more buyers in the market. The government’s initiatives like 100 percent foreign ownership and 10-year visa are the kind of privilege that the investors are looking for. We are targeting new markets like Africa, the US, and Canada to enhance foreign investments into Dubai.”
She added, “Dubai’s property, real estate infrastructure as well as investors are pretty matured now,” on the sidelines of the first day of the 3-day International Property Show, which began at the Dubai International and Exhibition Centre on Tuesday.
From January to November 2018, the total value of transactions reached Dh194 billion and investors pumped in Dh62 billion in investments.
Farhad Azizi, CEO of Azizi Developments said, “The first quarter of 2019 is much better than 2018. Things had started to improve from December 2018, not just for us, but for other developers as well. The momentum is picking up and there is a lot of excitement ahead of Expo 2020 Dubai. I believe that it is a good time to buy because prices are low.”
“The good thing is that the new demand is coming from new buyers. Majority of them are end-user and non-residents from China, GCC, Africa, India, and Pakistan,” he added.
Taimur Khan, Research Manager at Knight Frank said, “People are looking at Dubai as a long-term play. A lot of residents are thinking that it is time to go for a property buy. If you’re here for longer than 2 years and 3 months, it makes a lot of sense to buy property with the kind of payment plans being offered in the market.”
He acknowledged that the demand existed, provided that developers offered the right kind of product. He also noted that it would be at least a couple of years before Dubai’s real estate market overcame the excess supply.
Current inventories will be absorbed by the market by winter when demand will pick up and there might not be enough supplies left for buyers feels Atif Rahman, Director and Partner of Danube Properties. “That’s why it is the right time to buy for end users who can get the best from the bargain.”
He added, “Right now, off-plan sales might grow at a slow pace and the sale of ready-to-move-in homes might be an attractive proposition, depending on how the developers attract the home buyers.”
According to Property Finder research, “Robust activity in the secondary market denotes that end-users are still active and purchasing homes in Dubai. When compared to the first two months of 2018, off-plan property transactions have declined by 7.8 percent this year.”
Lynnette Abad, Director of Research and Data at Property Finder said, “Prices in the secondary market continue to be more attractive and affordable, while sellers have been much more motivated, one reason due to their competition with off-plan, ready stock.” Secondary market transactions in January and February 2019 saw only a marginal decrease of 1.4 percent year-on-year.
Azizi predicted, “Prices will be 10 percent more expensive, provided it is a good location project.” The price of an apartment that now costs Dh1 million will increase to about Dh1.1 million by December 2019.
Azizi believes that properties in the vicinity of Sheikh Zayed Road such as Downtown, Dubai Marina, JBR, etc. will continue to witness sustained demand over the next 5 to 10 years.
Downtown extension, DIFC 2.0, Business Bay, and Jumeirah are interesting developments that will perform well in the next five to 10 years, says Taimur Khan of Knight Frank. “If developers can rightfully match demand with the supply, then there is no reason why we can’t see prices rising at a slow, but stable rate in the coming years. In 10-years, if we can get CAGR of 3-4 percent, we would be happy,” he added.