The total number of Dubai off-plan transactions in the third quarter of 2017 increased by 86 percent from the previous quarter, according to Chestertons MENA.
The real estate consultancy also said that the value of off-plan transactions was up by 118 percent to AED4.04 billion ($1 billion).
Its report showed that the most transacted area in Dubai was Dubai South with a total of 1,151 transactions, closely followed by Downtown Dubai with 821 transactions and Business Bay with 686.
Downtown commanded 50 percent of the total value of off-plan sales in Q3.
“With reference to off-plan transactions, Dubai’s real estate market has witnessed seasonal peaks and troughs in the last year due to high levels of uncertainty. After a promising start to 2017, sales plummeted during a disappointing Q2 however they have picked up positive momentum in Q3,” said Ivana Gazivoda Vucinic, head of Advisory and Research, Chestertons MENA.
Chestertons said the increased interest in off-plan units had a continued negative impact on completed units where an 11 percent decrease in transaction volumes and a 19 percent in values was witnessed.
“In Q4 we expect to see further corrections of sales prices and rents. A slight pickup of completed unit transactions is expected, this will however have a negative impact on off-plan sales transactions which we expect to decline and then stabilise,” said Vucinic.
Chestertons said apartment sales prices have continued to decline during the third quarter of 2017 witnessing a drop of 2 percent.
Prices varied significantly from community to community within the apartment market with Dubai Silicon Oasis declining 9 percent while The Greens witnessed growth of 13 percent, by far the best performing area in Q3. Dubai Marina was the only other location to witness an increase of 2 percent.
Apartment rental values fell further in the third quarter after additional stock entered the market leading to a 3 percent decline.
Villa sales prices have been more resilient due to the higher level of corrections during the previous quarters. The Meadows and Springs were the worst affected areas, both recording a 7 percent decline.
In the villa rental market, three-bedroom units witnessed a modest 4 percent increase during Q3, while other sized units declined by 2 percent (two bedrooms), 3 percent (four bedrooms), and 1 percent (five bedrooms).
“To stimulate demand, we are increasingly seeing landlords now offering more favorable rental plans, these include up to 12 cheques and even rent-free periods as an incentive to lease properties,” said Vucinic.
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