Samir Salya on Dubai property in 2017

In 2017 we’ve witnessed a great deal of change in Dubai’s property market. Shifting from high price properties and rentals to off-plan sales, lower rents and lower priced houses surging in popularity. This transformation is helping to revive what was a flagging market.

The Dubai Land Department (DLD) has noted upsurges and declines throughout the year, with the overall market seeing less stability than previously.

Off-plan sales

The clear high point for the market is, once again, off-plan sales. Accounting for 74 per cent of the total number of transfers, this sector revived the market. Similarly, it has seen a 55 per cent increase year on year. Up to and including 27 November, the year has seen 18,657 off-plan apartment sales transactions.

Dominating the sector, off-plan sales drove the majority of sales in the area. This is particularly seen in the fourth quarter of the year. Transactions are continuing to rise and currently stand at 2,515 sales of apartments and 235 townhouses/villas. The most popular type of off-plan properties are one-bedroom flats, accounting for 39 per cent of sales. Studio apartments account for a further 36 per cent.

DLD data shows this momentum in off-plan sales is being driven by a larger proportion of chain-free buyers than before. Particularly, first-time buyers have been more interested in this area.

Rental market

Notably, 2017 has seen a shift in power from the landlord to the tenant. The rental market has dropped  in the past year, with an oversupply of property partly to blame. More importantly, an updated Dubai Rental Index is helping to maintain a fair and transparent rental market, meaning landlords are unable to charge prices above a certain cap and high prices don’t deter renters.

According to Property Monitor’s database of rental contracts, the declining figures for rental income fell across all property types and areas.

Lower priced inventory

Residential property transaction prices traded within a range of Dh1.25 million to Dh1.5 million for apartments and Dh 1.7 million to Dh 2.1 million for villas/townhouses. This lower average is being driven by the larger proportion of chain-free buyers again. Again, first-time buyers are a vital part of the market’s success, as they are entering the market enthused by lower prices and the attractive payment plans offered by some developers. With this trend in high demand, the sector has seen a higher focus on more affordable property.

Upcoming supply

The area will see more properties completed by the end of the year, the Property Monitor Supply Tracker reports. There are expected to be over 13,000 units finished by 2017, however some of these projects are likely to be pushed to 2018. The same report notes that over 40,000 projects are scheduled for 2018. With over 3,800 units expected for 2018, Mohammed Bin Rashid City is looking to be the most popular development area of the upcoming year.

About Samir Salya

Samir Salya is the Chairman of Reign Holdings and is involved in UK and UAE real estate and construction. Samir holds over 20 years’ experience in executive management, business expansion, performance improvement, sales and marketing.