Only a handful of developers launched new projects last month, including Emaar Properties and L-I-V Real Estate Development. This comes in the wake of an astounding year for off-plan sales in 2017. According to Chestertons Mena, off-plan transactions increased 60 per cent in 2017.
"In terms of residential property transactions, off-plan dominated the market throughout 2017. Going forward, we expect the off-plan market to decrease as the addition of new supply would suggest it will be ready units that will see an increase in demand," said Ivana Gazivoda Vucinic, head of consulting and valuations and advisory operations, Chestertons Mena.
"The main trend we will see in 2018 is that the secondary market will overtake the off-plan market in terms of deals done. With more handovers coming up of affordable housing, there will be a huge buzz and demand. What a lot of buyers will be waiting for is handover so they can secure 75 per cent finance and move forward with a purchase. Off-plan will still have a big part to play in the market, but after the acceleration in 2017 of this sector, we can expect some drop off in what is announced or launched, which is a natural way for the market to go," says Lewis Allsopp, CEO, Allsopp & Allsopp.
In January 2018, 1,645 off-plan deals were registered in Dubai compared to 2,281 units 12 months ago, says GCP-Reidin data.
In terms of value, off-plan sales worth of Dh2.04 billion were transacted in January 2018 in contrast to sales worth Dh3.375 billion 12 months ago.
Communities that performed particularly well for off-plan sales were Meydan (up 3,043 per cent), Dubai World Central (119 per cent), Jumeirah Village Circle (115 per cent) and Town Square (29 per cent) and Dubai Creek Harbour.
It seems that developers are being cautious about off-plan launches to factor in for the VAT effect. It will be hard to see the off-plan market perform to the same extent as it did in 2017. Developers will find it difficult to sustain the pace of launches, offers and incentives as 2017.
Even in the ready market, the volume of sales transactions in Dubai dipped 24 per cent in January 2018 while the value of such deals decreased 26 per cent compared to January 2017. The final January tally for ready properties was 867 units against the 1,138 deals a year ago.
Ready properties worth Dh1.307 billion were transacted last month compared to Dh1.769 billion 12 months ago.
Apartments in Dubai Marina and Sports City performed well in the ready market while villas in Arabian Ranches, the Springs and Meadows and Jumeirah Islands saw robust demand.
"There are just as many good opportunities now in the secondary market as there is off-plan. Developers very rarely lower their prices to fall in line with reduced market trends while the secondary market is more driven by sentiment and emotion. Because of this, I believe there are just as many 'good deals' to be had in the secondary market," says Myles Bush, CEO of PH Real Estate.
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