· Rental and sales indices for Dubai’s real estate market in 2018 revealed
· Report offers key insights into trends in the residential, office, retail and hospitality sectors
· The firm casts outlook for real estate market in 2019, highlighting challenges and opportunities
Cavendish Maxwell, a leading property consultancy and chartered surveying firm headquartered in Dubai, released its Property Market Report for Dubai in 2018 at its annual breakfast briefing event. The briefing marks the fourth comprehensive report on the health of the local property market, covering residential, office, retail and hospitality sectors within the industry. The market report was compiled by the firm’s in-house strategic consulting and research team, drawing data from Property Monitor, its real estate intelligence platform, and in collaboration with its extensive client and partner portfolio.
Commenting on the report, Manika Dhama, Head of Strategic Consulting and Research at Cavendish Maxwell, said:
“Dubai’s real estate market continued to face challenges in 2018. Certain fundamental demand factors, like increased government spending, regulations, policies and up-take need to improve for a recovery in 2019. Our transparent and accurate reporting is unmatched in this market and is part of our continued commitment to providing our expertise to help participants in the UAE’s real estate industry make informed decisions and drive growth in the sector.”
The event also hosted an all-female panel discussion titled “Trends, Challenges & Future Opportunities”, and comprised five experts from various industries related to the real estate sector. Khatija Haque, Head of MENA Research at Emirates NBD, Victoria Downes, Head of Operations and Business Development at Aedas, Hazel Shakur Quinn, Partner – Real Estate at Byron Cave Leighton Paisner, Sarah Bacon, Cofounder and CEO of We Share Property, and Manika Dhama from Cavendish Maxwell, together weighed in on the findings of the report and the outlook for the sector and Dubai’s overall economy in 2019.
Key market insights
The 2018 Dubai Property Market Report revealed several key insights into trends in the local real estate market, which will likely continue into 2019.
In the residential sector, prices continued to decrease, with villas/townhouses now costing an average of AED 1.8 million – down from AED 2.3 million in 2017 – and prices for apartments averaging AED 1.2 million, making the prospect of purchasing a residential property more attractive for residents and overseas investors alike.
In the office sector, rentals mostly declined in secondary locations, as tenants and investors favoured Grade A fitted stock in prime business areas such as DIFC, Business Bay, Dubai Marina and One Central buildings in the World Trade Centre district.
The retail sector witnessed developers becoming more flexible on lease terms and offering incentives to retain tenants and new entrants, in order to offset the downward pressure. Demand from international brands for outlets in destination malls such as Mall of the Emirates and The Dubai Mall remained strong.
Dubai’s hospitality market continued to see incentives from the Dubai government to strengthen demand, like free limited-stay visas for transit passengers and a VAT refund scheme for tourists. Cavendish Maxwell also recorded a further 1,303 rooms added to Dubai’s hotel room inventory, in addition to the Dubai Corporation of Tourism and Commerce Marketing’s (DCTCM) reported figures, marking a total room inventory rise of 6.9% in 2018.
The Dubai Land Department committed an exclusive partner report to Cavendish Maxwell’s research, revealing that AED 194 billion worth of transactions occurred from January to November 2018, with Emiratis responsible for the largest share in Dubai’s real estate market, worth AED 11.5 billion. This was followed by Indian (AED 10.8 billion), British (AED 4.3 billion), Pakistani (AED 2.8 billion) and Jordanian (AED 1.5 billion) investors, with investors from Saudi Arabia, China, Egypt and Canada also contributing notable shares of the total transaction volume.
Commenting on the new regulations introduced by the UAE government, H E Sultan Butti bin Merjen, Director General of Dubai Land Department (DLD), said:
“DLD is building a world-class real estate environment based on innovation and sustainability. We are also committed to the use of integrated property legislation that guarantees the full rights of all parties with integrity and transparency.”