KHALEEJ TIMES, Wednesday, Nov 27, 2019 | Rabi Al Awwal 30, 1441
Abu Dhabi, Dubai property prices have bottomed out
Emirates:
Property prices in Dubai and Abu Dhabi are bottoming out and there is no room to
drop prices any further by developers and landlords, say analysts and industry
executives.
They say that the secondary market stock will remain challenged by
newly-delivered and off-plan stock and also keeping sales prices under pressure.
"Whilst a recovery is yet to be seen in Abu Dhabi residential property, we are
reaching a pricing floor where developers and landlords, particularly those who
are leveraged, may not have room to drop prices any further - albeit,
translating to a bottoming out of the market," says Prathyusha Gurrapu, head of
research and advisory at real estate consultancy Core.
With limited future supply, she sees downward pressure on existing inventory is
easing in the UAE capital. "Secondary sales prices continued to weaken across
most apartment and villa communities, eight per cent on average across the city
over the past 12 months. Prices in various communities such as Al Raha Beach,
Yas and Saadiyat Island saw relative resilience with lower level of drops,
displaying a preference for newer and quality build products. We continue to see
a flight to quality and affordability from both end-users and investors,"
Gurrapu said in its latest update.
Currently, total Abu Dhabi residential stock stands at 264,000 units. Core
predicts an additional 1,000 units are scheduled to be handed over in Abu Dhabi
by 2019-end, however, some of these deliveries may be pushed to early next year.
Looking ahead in 2020, it expects over 5,000 units to be delivered.
Muhammad BinGhatti, chief executive officer of Dubai-based BinGhatti Developers,
also doesn't see further drop in prices in Dubai. "We're at a stage of bottoming
out. I don't really see room for downward slope now. Prices are either going to
rise or remain stable in the coming period for several reasons - fiscal
policies, ease of visa norms and fall in cost of living."
Francis Alfred, managing director and chief executive officer of Sobha Realty,
also sees real estate prices almost bottoming out. "Prices are as low as 2010-11
level. Contrary to what the market says, there is an increase in transaction
volume. The speed at which projects were happening earlier, are not going at the
same pace. If developers become disciplined, the market can be much more stable
in terms of cash-flow. We ensure not to stretch the limit of vendors and
stakeholders to maintain stability of supply chain," Alfred said.
Dubai Land Department reports revealed that real estate transactions in the
emirate rose 12 per cent in 2019, compared to the same period last year.
Property Finder data showed that on November 24 witnessed an 11-year high in
terms of the number of overall property transactions registered in Dubai in a
single day. A total of 515 real estate transactions cumulatively worth Dh888.3
million were registered in Dubai on the day, the highest since 2008 when data
became publicly available.
Alfred noted that there has been positive impact on Dubai property as launches
have softened following higher committee came into being to maintain
supply-demand balance.
Walid Al Zarouni, chairman of W Capital Real Estate Brokerage, said Dubai's real
estate sales curve is on the rise as the Dubai Expo 2020 is less than a year
from now. He noted that new laws and regulations introduced during the past few
years will stimulate the real estate sector and accelerate its growth during the
next year.
He echoed that the real estate market in Dubai offers better opportunities for
both investors and tenants alike during the third quarter of this year.