Majority of agents predict new buyer enquiries, seller instructions and agreed sales to increase in Q1
Residential property prices in some communities in Dubai have begun to show positive month-on-month per cent change for the first time in 12 months. The Property Monitor Index (PMI), which tracks residential sales and rents across Dubai and Abu Dhabi, turned ‘green’ for areas such as Al Furjan, Discovery Gardens and Dubai Silicon Oasis.
“In January, we began seeing a change in our monthly PMI, with some areas showing a growth month on month, albeit at modest increases of 0.0 per cent to 0.12 per cent. Since the index tracks live transactional data from agents, valuations and our in-house database, these changes are a reflection of the direction of the market. We will be watching the numbers closely in the coming months for early signs of a market-wide turnaround,” says Lynnette Abad, partner at Property Monitor, the data platform offered by Cavendish Maxwell.
The Cavendish Maxwell Residential Market Survey, conducted quarterly among agents in Dubai, revealed that majority of agents predict new buyer enquiries, seller instructions and agreed sales to increase in Q1 2017, as opposed to their predictions of prices and rents remaining largely unchanged in Q4 2016, which was reflected in the quarter end results.
“As the consumer is becoming more environmentally responsible, projects and communities geared towards sustainability are becoming more popular and are in line with Dubai’s focus on creating a more green economy. We will see a rise in prices during 2017 and particularly more as we creep toward 2020. Work/live/play environments will be more attractive and especially in the more affordable areas such as Al Furjan, Discovery Garden and Silicon Oasis,” says Zarah Evans, managing partner of Exclusive Links Real Estate in Dubai.
As of December, prices in Dubai declined by over 15 per cent on average since highs seen in Q2 2014. Key contributing factors have been limited liquidity in the market due to rising costs such as transport, schooling, etc., in addition to the supply being added every quarter over the last 12 to 18 months.
“In the first half of this year, significant supply is expected in areas such as Dubailand, Business Bay and Sports City and this will continue to put pressure on prices in coming months. Nearly 76 per cent of the total scheduled supply in 2017 is apartments,” says Manika Dhama, senior consultant at Cavendish Maxwell.
“While price declines have promoted increasing interest from first-time buyers, the deposit requirements and equity contribution on the overall purchase are still prohibitive for most. Improved activity from owner occupiers is a sign of a maturing market and growth in activity from this segment in Dubai residential property will be based on factors such as expat job growth and lending parameters that especially cater to them,” she adds.
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