The real estate sector was a major player in the continuing expansion of the economy last year, accounting for 13.3% of GDP—good for third, thanks in part to the Government of Dubai, which strongly contributes to the expansion of many areas that are connected with the real estate sector. Now that we’re more than halfway through this 2015, let’s take a look at the Dubai real estate market for the second quarter of 2015.
Apartments
The Dubai property market for apartments slowed down on the second quarter of 2015, with average apartment sales prices across the city dropping to the same level as in the first quarter of 2014.
The market price “correction” didn’t come as a blindsided surprise to industry experts. When analyzing the volume of transactions, the prices did not keep pace with the expected sales price growth but instead rose at a slower rate. Demand declined slightly in the first quarter and rather more steeply in the second quarter of this year.
However, there were some spots that are still going strong. Average sales prices in Business Bay have actually risen, albeit in a gradual rate over the past few years even though demand has remained constant. The district currently has more than 40 developments currently under construction by various developers, the majority of which are expected to be finished and handed over in 2016 and 2017. Additional developments are currently on the pipeline.
In Downtown Dubai, prices were 19% lower than at the 2014 peak. During the second quarter of this year, demand has been steady and at a healthy level.
Contrary to the two situations above, sales prices in Dubai Marina and Jumeirah Beach Residence (JBR) are declining which causes buyers’ interest to pick up. The same goes with Palm Jumeirah. Sales prices are 12.5% lower than at 2014 peak. There are 20 projects currently are under development on the island with more at planning stage.
Villas
Sales prices of villas have been falling for the third quarter in a row, since late 2014 to date. However, buyers’ sentiment has picked up due to the continued fall of prices. As a result, the number of transactions recorded in the villa segment has started to rise again.
Following the general trend across the emirate, the volume of transactions of prime villas in high-end developments within the Jumeirah Park, Jumeirah Islands, Emirates Hills and Arabian Ranches communities has kept increasing since late 2014. Prices in the first three areas declined in the second quarter, while sales prices at Arabian Ranches’ rose by 5%.
Among these prime communities, Arabian Ranches supply is the highest with more than 4,000 villas. The community is also the fastest growing. By 2018 Emaar, the developer will deliver nearly 2,500 new homes including the Mira Oasis, Lila, Azalea and Samara Rosa, and Rasha Villas sites.
SOURCE: Roots Land Real Estate
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