Dubai Real Estate Market in Q3 of 2018: Price, Rent Decline Continued

  • According to the Property Monitor Index, rents have registered 12-month declines of 6.0% on average
  • An estimated 6,000 residential units have been handed over across Dubai during the third quarter

Cavendish Maxwell has released its Q3 2018 Dubai Real Estate Market Report providing a summary of the residential market activity and highlighting price and movement 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 a sector focus on hospitality.

Price and Rent Performance

In Q3 2018 sales prices across the residential market registered quarterly declines of 1.4% and 1.3% for villas/townhouses and apartments respectively. Meanwhile rental declines have averaged 1.3% over the same period. Rental declines were more pronounced in Dubailand, The Greens in Emirates Living, Motor City, Arabian Ranches and Victory Heights averaging 12 month change of around 7%. According to Property Monitor’s database of rental contracts, the majority of the rental agreements for residential properties in Q3 2018 were in one cheque (45% of total), which has increased by 7% compared to last quarter. Rental payments made in 4 cheques decreased by 2% over the quarter.

Residential Sales

Off-plan transfers accounted for 53% of the total transfers in Q3 2018. Business Bay, Mohammed bin Rashid City and Jumeirah Village Circle dominated the off-plan apartment transfers during the third quarter of the year. On the other hand, International City, Dubai Marina, Jumeirah Village Circle led the secondary market apartment transfers, which accounted for 31% of the total apartment secondary transfers during Q3 2018. Secondary market transfers among villas surpassed the off-plan transfers in Q3 2018, led by Emirates Living, Arabian Ranches, Mudon developments which together accounted for 30% of the total secondary market transfers registered during the third quarter.

Residential Supply

The majority of the upcoming supply over the next six months is concentrated in Business Bay, Jumeirah Village Circle, Dubai Sports City, Dubai Silicon Oasis and Town Square. Approximately 72% of the upcoming supply over the next six months is expected to be handed over during Q4. Increasing handovers will continue to impact rents in most locations across Dubai as tenants have more choice. This will also impact occupancies in existing stock and should be factored into net yield estimations for the forthcoming period.

Property Monitor Residential Survey

The report also incorporates the Property Monitor Residential Survey, conducted among partner agents operating within Dubai. The survey shows that majority of agents expect prices and rents to decrease by up to 5% in Q4 2018. However, majority also believe that the transaction activity will improve over the next quarter and buyer enquiries, seller instructions and agreed sales will be higher than those in Q3.


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