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Wed 12 Jul 2017 01:24 PM

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'Summer slump' hits Dubai property market as transactions fall 23%

Chestertons report says off-plan sales plummet by up to 43% in value in second quarter of 2017

'Summer slump' hits Dubai property market as transactions fall 23%

The total number of Dubai residential transactions in the second quarter of 2017 declined 23 percent from the previous quarter, signalling the onset of a summer slump, according to Chestertons MENA.

The real estate consultancy's latest report said that after a promising start to 2017, the sales of off-plan properties plummeted by 28 percent in terms of volume and by as much as 43 percent in value.

It added that transactions of completed units were also down by 17 percent in volume and 7 percent in value.

Apartment sales provided some consolation for the market as it remained flat compared to Q1 while villas saw a 3 percent increase.

However, rental rates for both villas and apartments fell by 2 percent during the same period.

“The positive momentum from the first quarter did not translate into increased activity in the second quarter, as the decline was evident in both completed-units and off-plan transactions, with the total volume of residential transactions down 23 percent,” said Ivana Gazivoda Vucinic, head of Advisory and Research, Chestertons MENA.

“Seasonality and an amount of uncertainty have curbed transactional volumes. However, we expect increased activity as we approach second half of the year.”

She added: “It is also expected that sales and rental values will maintain the same trend, moving into the last quarter of the year when transactional activity picks up again.”

Chestertons said apartment sales prices in Dubai Silicon Oasis grew 13 percent, the highest quarterly increase among observed areas, while Jumeirah Village Triangle rose 11 percent.

The introduction of new stock negatively impacted the sales prices in areas like Business Bay and Dubai Land at 12 percent and 10 percent respectively while Downtown recorded a 7 percent decline.

Quarterly sales prices in the villa market increased 3 percent overall, continuing the positive trend from the previous quarter as Palm Jumeirah rose by 10 percent; the report added.

“Second quarter apartment sales prices remained stagnant and the recent addition of new stock resulted in downwards pressure on pricing in some secondary areas. The majority of the more established areas saw no change with the exception of some that saw upward trends,” said Vucinic.

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