By Staff writer
Average rents dropped by 1%, according to Chestertons’ latest report
Off-plan sales jumped by 45% in Q1, as incentives and improved payment plans drew more investors.
Real estate agency Chestersons, in its latest report, said the figures help support Dubai’s improving position as a safe haven for investors.
Chestersons said that over the first three months of the year, there was also a 4% average rise in the number of transactions for ready properties, leading to 25% increase in overall transactional activity during that period.
“In the first quarter we witnessed positive movement on the residential transaction side for both transaction values and volumes,” said Ivana Gazivoda Vucinic, head of advisory & research, Chestertons MENA.
“This is partly due to the increase in incentives and payment plans created by developers to make it more financially amenable for investors to purchase property.
“The increased number of transactions was followed by increased transactional value, which stood at AED12.28 billion ($3.3bn) for both ready and off-plan units, which is a 31% increase compared to the previous quarter and an indication that price points are now more in line with buyer expectation.”
Vucinic said there are early signs that residential market is “on its way to recovery”, despite concerns about oversupply issues. During 2016 there were 16,000 units added to the market, with a further 15,000 expected to be delivered in 2017.
He said the realisation rate is increasing, from 30% a few years back to almost 45-50% now, a sign of a more regulated and efficient market.
“With a growing population and ever-present foreign investors’ appetite, we expect the forecasted units due for delivery this year to be easily absorbed by additional demand,” he said.
Chestertons said that residential rents dropped marginally in Q1 by 1% across the emirate, with properties in DIFC bucking that trend with an overall 4% average increase compared to Q4 2016. In Dubailand, rents fell by an average of almost 4%, with similar drops experienced in JLT and Remraam.
Villa rentals also fell, on average, by 1%, with villas in Victory Heights (8% on average) and The Springs (average 6%) experiencing the greatest drops. The Lakes saw rents increase by an average of almost 6%.For all the latest real estate news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.