Average apartment rents fell 4 percent during the third quarter of 2017, while annual comparisons showed a 12 percent slump, according to a new report.
The Q3 Dubai Real Estate Report from real estate consultancy Asteco showed that Dubai Marina posted the highest decline in rental rates at 19 percent, compared to Q3 2016, followed by Downtown Dubai (18 percent), Dubai Sports City (16 percent) and Bur Dubai (16 percent).
It also showed that average property prices in Dubai dropped by 4 percent over the past year, with Business Bay and Dubai Marina prices falling most.
The report, which highlighted no movement in apartment sales prices compared to the previous quarter, highlighted that year-on-year, Business Bay and Dubai Marina both posted an 8 percent drop, followed by Dubai Sports City, International City and Jumeirah Village, each recording a fall of 7 percent. Only The Greens and DIFC remained on par with Q3 2016.
Asteco said that in the first three quarters of the year, 10,200 apartments were delivered and a further 3,500 units are due for completion before the end of 2017. In 2016, the total supply was only 8,750 apartments.
“There has been a steady rise in new projects reaching completion. However, Asteco believes a significant amount of the supply previously forecasted for handover in Q4 2017 will spill over into 2018. These delays are likely to result from both intentional phasing considerations and unplanned construction delays and financial issues,” said John Stevens, managing director, Asteco.
The report highlighted marginal changes across all property types in Q3, with sales in the office and apartment segments remaining flat, and in the villa segment showing a decrease of 1 percent.
The figures are a minimal improvement on Q2 results, where price declines for apartments, villas and offices were recorded at approximately 3 percent, 2 percent and 2 percent, respectively.
“The Q3 results clearly showed a rise in transactions across the market, as owners and tenants continued to secure the best deal possible. However, while the market remained flat or witnessed marginal decreases, some areas did show more pronounced drops, particularly year on year,” added Stevens.
Similar patterns were recorded in the villa segment, with a nominal quarterly sales price drop of 1 percent and a decrease of 3 percent annually. Jumeirah Village posted the most significant decline at 9 percent, followed by Dubai Sports City at 6 percent.
Villa rental rates echoed the apartment market, with 3 percent fall compared to the previous quarter and a 10 percent drop annually.
A total of 2,325 villas were delivered in the first three quarters and an additional 1,300 units expected for completion in 2017. That compared to the 5,000 delivered in 2016.
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