Asteco says some banks, developers stipulating minimum salary as affordability remains at forefront of market
Affordable housing options remain at the forefront of Dubai buyers’ interest, with many banks and developers stipulating a minimum monthly salary of AED15,000 ($4,083) in order to purchase property in the emirate, according to a new report.
Asteco’s Dubai Real Estate Report Q1 2018 recorded an annual decline in villa and apartment sales of 6 percent and 9 percent respectively, with large villas at high price points generating limited interest, mainly due to the lower investment yields associated with this type of product.
John Stevens, managing director of Asteco, said: “We have seen a moderate increase in enquiries and transactions for high-end residential units, suggesting that albeit at a conservative level, there is still appetite for such accommodation.”
The annual rental decline, for both apartments and villas, has averaged approximately 10 percent, while incentives such as multiple cheques, rent-free periods, and the absorption of utility, maintenance and/or agent fees have become the norm.
He said some of Dubai’s popular communities have witnessed the sharpest decline in rents including Jumeirah Beach Residence (15 percent), while Downtown Dubai, Dubai Marina and Deira rents fell 14 percent.
Other areas that have demonstrated a significant decline in rents were Palm Jumeirah, Business Bay, Greens and Dubai Sports City.
Stevens added: “While on the whole, the residential sector has witnessed only a minimal decline of 1 percent quarter-on-quarter, it is important to note that newly handed-over, lower-end buildings in areas with significant supply potential have struggled with occupancy, particularly where rates and incentives were not aligned with the market.”
Approximately 3,625 residential units were handed over in Q1, with a total of 30,000 potentially to be delivered by Q4 2018, Asteco noted.