Рынок недвижимости Дубая: покупатели возвращаются, число сделок растёт

Dubai's property market is showing green shoots. Transactions rose in the first two months of 2019, and developers are reporting good numbers as lower prices attract new buyers despite oversupply.

The Regulator's View

"In the first two months of 2019, there is increase in number of transactions. There are more buyers in the market. The government's initiatives like 100 per cent foreign ownership and 10-year visa are the privilege that the investors are looking for. We are targeting new markets like Africa, the US and Canada to enhance foreign investments into Dubai," said Majida Ali Rashid, assistant director-general of the Dubai Land Department (DLD).

"Dubai's property, real estate infrastructure as well as investors are pretty matured now," she said on the first day of the three-day International Property Show at the Dubai International Convention and Exhibition Centre. In the first 11 months of 2018, transactions were worth Dh194 billion, and investors put Dh62 billion into the market between January and November.

Developers Report Momentum

Farhad Azizi, CEO of Azizi Developments, said activity has improved since December 2018 and the first quarter of 2019 has outperformed the same period last year.

"The first quarter of 2019 is much better than 2018; things had started to improve from December 2018, not just for us, but for other developers as well. Momentum is picking up and there is a lot of excitement ahead of Expo 2020 Dubai. I believe it is good time to buy because prices are low," he said. "The good thing is that new demand is coming from new buyers. Majority of them are end-user and non-residents from China, GCC, Africa, India and Pakistan."

He added that some developers offer a business licence with a new home as an extra incentive. "We like those things so we have done it as well. Dubai has that 'wow' effect and when the 'wow' effect is there the trend will pick up. I still think that it is a good time to buy."

Taimur Khan, research manager at Knight Frank, said demand is there as long as developers build the right product, though the market will need a couple of years to move past the supply glut. "People are looking at Dubai as a long-term play. A lot of residents are thinking that it is a time to go for a property buy. If you're here longer than 2 years and 3 months, it makes a lot of sense to buy property with the kind of payment plans being offered in the market," he added.

Atif Rahman, director and partner of Danube Properties, expects current inventory to be absorbed by winter, when demand rises and supply may run short. "That's why, it is the right time to buy for end-users, who can get the best from bargain." He said the market will keep attracting investment whatever happens to supply and demand. "Right now, off-plan sales might grow at a slow pace and sale of ready-to-move-in homes might be an attractive proposition, depending on how the developers attract the home buyers."

Off-Plan and Secondary Sales

Property Finder data shows off-plan homes made up 55% of Dubai transactions in the first two months of 2019, with the secondary market accounting for 45%: 3,069 off-plan homes and 2,463 secondary deals in January and February. In earlier cycles, off-plan dominated and resales trailed far behind, so this unusual balance suggests Dubai is no longer a purely investor-driven market.

"Robust activity in the secondary market denotes that end-users are still active and purchasing homes in Dubai. When compared to the first two months of 2018, off-plan property transactions have declined by 7.8 per cent this year," Property Finder said.

"Prices in the secondary market continue to be more attractive and affordable, while sellers have been much more motivated, one reason due to their competition with off-plan, ready stock," said Lynnette Abad, director of research and data at Property Finder. Secondary transactions were down only 1.4% year on year.

For apartments, Palm Jumeirah, Dubai Marina and International City saw the most secondary-market transactions, while Dubai Hills Estate, Downtown Dubai and Dubai Creek Harbour (The Lagoons) took most off-plan deals. Read more about how off-plan property investment in Dubai works today.

Outlook

Azizi forecast that a Dh1 million apartment will be worth about Dh1.1 million by December 2019. "Prices will be 10 per cent more expensive, provided it is a good location project." He expects homes close to Sheikh Zayed Road, such as Downtown, Dubai Marina and JBR, to remain in demand for the next 5 to 10 years.

Knight Frank's Khan highlighted the Downtown extension, DIFC 2.0, Business Bay and Jumeirah as developments likely to perform well over the next five to 10 years. "If developers can rightfully match demand with the supply, then there is no reason why we can't see prices rising at slow but stable rate in the coming years. In 10-years, if we can get CAGR of 3-4 per cent, we would be happy," he added.