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Dubai, 21 January 2018: Cavendish Maxwell has released its 2017 – A Year in Review Dubai Market Report providing a summary of the residential market activity and highlighting price movement, rent and yield statistics, residential transactions and upcoming supply of residential properties. The data is provided by Property Monitor, a real estate intelligence platform powered by RICS accredited property professionals. The report also includes special partner reports from Dubai Land Department and the Affordable Housing Institute and a sector focus on education.
HE Sultan Butti bin Mejren, Director General of Dubai Land Department, reports on the Dubai real estate market over the first 11 months of 2017. Total transactions between January and November 2017 reached a value of AED 252.774 billion. Emiratis were the top investors in the Dubai’s real estate market, investing nearly AED 24 billion, followed by Indians, Saudis, Britishers and Pakistanis. The top three areas for investment are Business Bay, generating a total of 2,257 transactions worth AED 6.632 billion, closely followed by Marsa Dubai with 3,061 transactions worth AED 6.5 billion and Al Barsha South Fourth with 2,920 transactions worth 3.627 billion.
Price movement in the last 12 months has varied between communities and among different buildings within the same community, thus reflecting greater differentiation in how available properties are now trading. During 2017, residential property rents declined at a more pronounced rate than sales prices, resulting in yield compression in most communities. Rent decline is expected to continue during the first quarter of 2018, with new handovers planned in both freehold and leasehold communities across Dubai.
According to Dubai Land Department’s property transfer data, the majority of residential units sold both in the off-plan and secondary market during 2017 were from Emaar Properties. Nakheel, Dubai Properties Group and Damac Properties were also top developers based on volume of sales and value of transactions in 2017.
The report also examines affordable housing in Dubai through a special feature presented by Maysa Sabah Shocair, MENA Managing Director of the Affordable Housing Institute. The review highlights the main challenges that are faced by Dubai’s middle and low-income housing ecosystem and the most common strategies used by developers to overcome the cost versus value challenge of building more affordable housing. For 2017, the overall market indicates a shift towards more affordable housing, with almost 82% of the residential transactions below AED 2 million and around 47% below AED 1 million.
The Property Monitor Residential Survey conducted among agents in the Dubai revealed that for Q1 2018 the majority of agents surveyed are predicting apartment and villa/townhouse prices as well as rents will decrease by up to 5%. Regarding transactions in Q1 2018, 44% of agents expect an increase in new buyer enquiries, while 43% of agents expect an increase in new seller instructions. The majority of those surveyed (65%) believe new seller instructions will also increase during the quarter Q1 2018.
The report also includes a sector focus on education, commenting on how the market has continually matured over the last three academic years and the trends that have shaped the industry in 2017. Dubai remains the fastest growing private schools market in the world with an estimated revenue of AED 6.8 billion in 2016/17. With the pressure on schools to reduce costs to stay as a strong option against competition, and teachers pressuring for higher salaries, consolidation of school owners is inevitable. As a consequence of market competition and maturing context, there has been significant pressure on tuition fee affordability.
Notes to editor
Sale prices and rents are derived from Property Monitor (www.propertymonitor.me), a comprehensive real estate data analytics platform established by Cavendish Maxwell in 2014. Property Monitor provides real-time, market-wide transactional data and trends and trends. Working with agencies, banks, developers and corporate investors, it provides deeper insight into real estate advisory, investment, and lending activities. The average sales price per sq ft is based on the Property Monitor Index which incorporates signed contracts, registered transactions, valuations and listings verified by Cavendish Maxwell’s market leading valuation department.
Property Monitor Residential Survey is a quarterly study of agent opinion designed to identify residential market sentiment. This research highlights how new enquiries, leasing activity and transactions, among other metrics, changed from quarter to quarter with agent predictions compared to actual real market performance.
Supply projections for residential projects are based on the regular tracking of construction projects, new launches and delays etc. This is achieved through site inspections as well as regular feedback from developers, contractors, Cavendish Maxwell’s building consultancy team and related government entities.
The information and analysis contained in this report has been obtained from or is based on information from a variety of sources generally regarded to be reliable and assumptions which are considered reasonable, and which were current at the time of undertaking market research. However, no representation is made, or responsibility accepted by Cavendish Maxwell Real Estate Consulting, in respect of the accuracy or currency of this information. Cavendish Maxwell Real Estate Consulting does not accept any liability in negligence or otherwise for any loss or damage suffered by any party resulting from reliance on this publication.
Cavendish Maxwell is a highly respected independent firm of chartered surveyors and property consultants, focusing on property services throughout the Middle East and Africa. Established in 2008, Cavendish Maxwell is now one of the region’s most in influential property consultancies, employing over 70 people from offices in Dubai, Abu Dhabi and Muscat.
As a fully qualified member firm of the Royal Institution of Chartered Surveyors (RICS), and with extensive knowledge of the region, Cavendish Maxwell has the necessary experience, expertise and insight to deliver property advice of the highest standard. The company’s reports are used for loan security, audit, insurance reinstatement, dispute resolution, risk management, debt recovery and performance analysis.
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