KHALEEJ TIMES, Thursday, Jul 11, 2019 | Zul Qaadah 8, 1440
Dubai realty to remain buyers, tenants' market for foreseeable future
Property prices and rentals in Dubai continued to decline in the first
half of 2019 and this trend will continue in the second half as oversupply will
keep the emirate a buyer-friendly market for a few more quarters - if not years.
In the sales market, prices for both apartments and villas witnessed a decrease
of 4 per cent in the last quarter. In the rental sector, there was a more marked
weakening compared to the previous period, with average apartment rates
declining by 5 per cent and villas by 8 per cent quarter-on-quarter. As a
result, many tenants have seen an increase in potential property options, latest
research from real estate services firm Chestertons said on Wednesday.
The emirate is projected to see delivery of 47,500 apartments, villas and
townhouses in 2019, which is nearly double of what was delivered last year.
"With the continuing oversupply, we would expect further declines in both the
sales and rental markets of circa 5 per cent in H2 2019," said Nick Witty,
managing director of Chestertons Mena.
"The bottom line is Dubai will continue to be tenant and home buyer-friendly for
the foreseeable future, until demand has caught up with supply," he said.
Whilst development continues at current and projected rates, it is unlikely that
an equilibrium will be attainable in the foreseeable future, Witty said.
"What we are likely to witness is a flight to quality in both the rental and
sales markets where tenants and buyers will focus on buildings in the most
desirable locations, offering the highest quality internal finishes and the
widest range of amenities on their doorstep," he added.
In the short term, he noted that oversupply will continue to dampen the value of
Dubai's residential real estate market.
"This is being compounded by several developer incentives including five-year
post-handover payment plans, registration fee rebates, freezing property service
charges and guaranteed rental returns. Similarly, landlords are offering
prospective tenants rent-free periods, multiple rent cheques and even short-term
To remain competitive, Witty noted that the developers are becoming increasingly
innovative. Emaar, for example, partnered with the Dubai Multi Commodities
Centre to offer buyers of its Executive Residences in Dubai Hills Estate a free
three-year renewable business licence, free three-year renewable family
residency visa and 100 per cent business ownership for some industry sectors,
Property Monitor data showed that residential real estate prices declined at a
faster rate in May, with apartment prices down 14.1 per cent year-on-year and
villa prices down 14.9 per cent year-on-year. BIS data also showed a similar
Haider Ali Khan, CEO of Bayut, said the first half of 2019 has been dynamic for
the overall Dubai market.
"Prices have continued to drop in key areas but there are more discussions
concerning property investments in the region as a result of the permanent
residency and long-term visa announcements. Dubai is also a competitive option
compared to other cosmopolitan cities such as London, Shanghai, Singapore and
Sydney, offering a similar standard of living at a much more affordable price
point," Khan said.
"Today, consumers can take advantage of the competitive prices available now and
enjoy returns as the market becomes more of a seller market. There are some
really good smart payment plans available in Dubai which are hard to find
anywhere else in the world. That coupled with the new initiatives launched by
the government in the past year, could lead to more expats considering the city
as a long-term option, resulting in more investment in Dubai real estate," he
According to Bayut, price trends for the first half revealed that apartments in
Dubai have largely witnessed decreases between 4 and 8 per cent for both sales
A survey of UAE investors and residents showed that the recently-implemented UAE
Permanent Residency Scheme has created a positive sentiment in the investment
A random survey of 1,012 respondents indicate that existing investors have more
appetite to increase their portfolio, while would-be investors are now more open
to start investing.
Around 79 per cent of UAE investors say that with the launch of the permanent
residency scheme (golden card), they will consider expanding their investments
in the country, according to a survey conducted by Lootah Real Estate
"The permanent residence visa is a great initiative by the government to
stabilise the country's economy, most especially the real estate market. An
increase on the interest of foreign investors and expatriates in buying
properties in the UAE is expected which will eventually drive the real estate
sector to a boom," said Saleh Abdullah Lootah, CEO of Lootah Real Estate