Will sales prices for Dubai apartments become more affordable in 2017? Are Dubai apartment prices really bottoming out? Or are they set to experience a rebound next year?
Property values of Dubai apartments have declined over the past 18 months and may soften further this year. The sales market has moved favourably towards the buyer with the price drop, putting investors and end users in a strong position and preparing sellers for a realistic view on pricing.
This has also put the focus on affordability. Newly launched properties that are affordable and offer attractive payment plans are attracting investor interest. The reputation of the developer is also playing a major role as both investors and end users want to be sure that their properties will be delivered as per stipulated timelines and that the promised infrastructure and community facilities will be completed.
While Dubai Marina, Palm Jumeirah and Downtown Dubai were amongst the most transacted areas in value terms, communities such as International City, IMPZ and Jumeirah Village recorded significant quarter-on-quarter increases in transaction values, underscoring the demand for affordable housing.
One of the reasons for the dip in Dubai apartment sales prices has been attributed to the huge supply of units that seems to be keeping property values down. About 36,000 units are estimated to be added to the inventory this year, of which 4,584 were delivered in the first quarter.
Not just Dubai apartment sale prices have declined; experts are suggesting that Dubai apartment rental numbers are experiencing declines too; which is good news for tenants looking for a new apartment or villa more suited to their budget and requirements. As per latest estimates by Bayut.com, the Dubai rental market saw rents dip further in August. Average rents across the emirate are reported to have fallen by five percent in August compared to figures in July this year.
We at Better Homes believe that while market analysis is important, a long-term approach is key to accurately assessing the market. Why? Because the effects of the mega Expo 2020 may only begin to impact the market towards the middle of next year and that may cause a rebound in sale prices.