- Residential property prices registered 12 month decline of 2% on average while rents declined by up to 5% in some key areas
- Off-plan residential properties accounted for 61% of the total transfers during the quarter
- Approximately 3,800 units were handed over in Dubai during Q1 2018
- Property Monitor Residential Survey reveals that for Q1 2018 the majority of agents are predicting apartment and villa/townhouse prices as well as rents will decline by up to 5%
Dubai: Cavendish Maxwell has released its Q1 2018 Dubai Market Report providing a summary of the residential market activity and highlighting price movement, rent and yield statistics, residential transactions and upcoming supply of residential properties. The data is provided by Property Monitor, a real estate intelligence platform powered by RICS accredited property professionals. The report also includes special sector focus on the industrial and warehousing sector.
Price and Rent Performance
Price movement in the last 12 months has varied between communities and among different buildings within the same community, thus reflecting greater differentiation in how available properties are now trading. During Q1 2018, residential property rents declined at a more pronounced rate than sales prices, resulting in yield compression in most communities. The pressure on housing allowances has also impacted rental market performance and the pool of tenants at the higher end of the spectrum continues to shrink. Rent declines will be more pronounced in areas with increasing supply and those located away from central business districts and public infrastructure.
Property Monitor Residential Survey
The Property Monitor Residential Survey conducted among agents in Dubai revealed that for Q2 2018 the majority of agents surveyed are predicting that apartment and villa/townhouse prices as well as rents will decrease by up to 5%. Regarding transactions in Q2 2018, 42.4% of agents expect an increase in new buyer enquiries, while 55.6% of agents expect an increase in new seller instructions. 38.9% of those surveyed believe new seller instructions will also increase during the quarter Q2 2018.
Sector Focus – Industrial and Warehousing
A sector focus on industrial and warehousing comments on how the market witnessed a continuation of trends from previous years with the vast majority of enquiries being for the small to mid-sized sector of the market. Buyers/tenants are being more cautious and are carrying out further due diligence on their available options prior to making real estate related decisions. This is prolonging the timeframe to conclude a transaction but is also characteristic of a more mature and stable market. Prime yields now stand a little under 8.5% which is a higher yield when compared to European markets.
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Sale prices and rents are derived from Property Monitor (www.propertymonitor.me), a comprehensive real estate data analytics platform established by Cavendish Maxwell in 2014. Property Monitor provides real-time, market-wide transactional data and trends and trends. Working with agencies, banks, developers and corporate investors, it provides deeper insight into real estate advisory, investment, and lending activities. The average sales price per sq ft is based on the Property Monitor Index which incorporates signed contracts, registered transactions, valuations and listings verified by Cavendish Maxwell’s market leading valuation department.
Property Monitor Residential Survey is a quarterly study of agent opinion designed to identify residential market sentiment. This research highlights how new enquiries, leasing activity and transactions, among other metrics, changed from quarter to quarter with agent predictions compared to actual real market performance.
Supply projections for residential projects are based on the regular tracking of construction projects, new launches and delays etc. This is achieved through site inspections as well as regular feedback from developers, contractors, Cavendish Maxwell’s building consultancy team and related government entities.
The information and analysis contained in this report has been obtained from or is based on information from a variety of sources generally regarded to be reliable and assumptions which are considered reasonable, and which were current at the time of undertaking market research. However, no representation is made, or responsibility accepted by Cavendish Maxwell Real Estate Consulting, in respect of the accuracy or currency of this information. Cavendish Maxwell Real Estate Consulting does not accept any liability in negligence or otherwise for any loss or damage suffered by any party resulting from reliance on this publication.
Cavendish Maxwell is a highly respected independent firm of chartered surveyors and property consultants, focusing on property services throughout the Middle East and Africa. Established in 2008, Cavendish Maxwell is now one of the region’s most in influential property consultancies, employing over 80 people from offices in Dubai, Abu Dhabi and Muscat.
As a fully qualified member firm of the Royal Institution of Chartered Surveyors (RICS), and with extensive knowledge of the region, Cavendish Maxwell has the necessary experience, expertise and insight to deliver property advice of the highest standard. The company’s reports are used for loan security, audit, insurance reinstatement, dispute resolution, risk management, debt recovery and performance analysis.© Press Release 2018