Cavendish Maxwell releases Q2 2017 Dubai and Abu Dhabi Residential Reports
- Marginal price declines continue, averaging 1% year on year for apartments and villas/townhouses in Dubai and 2% in Abu Dhabi during Q2 2017
- Average rents in Q2 2017 have declined moderately compared to the fourth quarter of 2016
- Cavendish Maxwell Residential Survey reveals that for Q3 2017 the majority of agents predict apartment and villa prices as well as rents to remain unchanged
Dubai, 10 July, 2017: Cavendish Maxwell today released its Q2 2017 residential reports providing analysis and summary of apartment and villa/townhouse properties in Dubai and Abu Dhabi. The reports highlight price movements, rents and yield scenarios, residential supply as well as the macro-economic factors impacting this segment.
Price performance
Prices for apartment and villa/townhouses in Dubai and Abu Dhabi have continued to decline during the first half of the year. In Dubai, Victory Heights, Business Bay and International City clusters all experienced year on year declines of more than 1.5%on an average in Q2 2017. In Abu Dhabi, villas/townhouses in Al Reef and Al Raha Gardens have experienced annual declines of 2% on an average during the same period.
Rent performance
Rent declines were more pronounced among villas in Al Furjan and two bedroom apartments in Dubai Sports City and International City (clusters). These categories of units exhibited quarter on quarter declines of more than 2%. “Landlords continue to be flexible in lease terms and rental amounts to attract tenants who are currently benefiting from increased supply and rent declines across the market”, said Manika Dhama, Senior Consultant, Strategic Consulting and Research at Cavendish Maxwell. “Payment through multiple cheques, first month rent-free are some of the options landlords are providing to reduce vacancy risk on their properties.”
In Abu Dhabi, rent declines were more pronounced among villas in Al Reef and apartments in Al Reem island, where rents declined more than 2% or more quarter on quarter. “The tenant profile in Abu Dhabi is currently more focused on affordable options and this is expected to continue as redundancies from oil price impact on businesses as well as recent mergers in the emirate which have affected high salaried senior executives more acutely,” said Dhama.
Transaction overview
In Dubai, off-plan sales accounted for the majority of total transactions in the first half of 2017. International City and Dubai Marina continued to lead the secondary market transactions this quarter, while the top locations for off-plan apartment sales were Jumeirah Village Circle, Dubailand, Dubai South and Business Bay. For villas/townhouses, majority of the secondary sales were completed in Reem (Mira), Emirates Living and Jumeirah Village Circle.
Residential supply
Approximately 3,100 residential units have been handed over across Dubai during Q2 2017 and 400 units have been handed over in Abu Dhabi investment zones during the same period. The majority of the units handed over during Q2 in Dubai were located in areas such as Silicon Oasis, Dubailand, Al Nahda, among others. In Abu Dhabi all the units handed over this quarter were apartments on Al Reem island. In Dubai, approximately 27,389 units are scheduled for delivery during the remainder of 2017, while in Abu Dhabi investment zones the scheduled delivery is 2,100 units. Actual completions may vary significantly.
Cavendish Maxwell Residential Survey
The Dubai report also draws on the Cavendish Maxwell Residential Survey conducted among agents in the emirate. For Q3 2017 the majority of agents surveyed predicted apartment and villa/townhouse prices as well as rents will remain unchanged. In terms of transactions, 56% of agents expect new buyer enquiries to increase, while 54% expect an increase in the number of agreed sales. The majority of those surveyed (54%) believe new seller instructions will also increase during the Q3 of 2017.
