The Observer published a new Dubai Residential Q1 2019 report by by Chestertons.
The downward price corrections witnessed throughout 2018continued in Q1 2019, albeit at a slightly slower pace than witnessed in Q4 2018. Average apartment sales prices were down 3% from the last quarter, while average villa prices were down 1% from Q4 2018.Off-plan sales continued to dominate the market in Q1, which indicates the incentives offered by developers are having the desired effect.
These incentives include 5-year post-handover payment plans, the rebate of registration fees, freezing property service charges and guaranteed rental returns. It is also worth noting that off-plan inventories are largely focused on the affordable, mid-market options, which is likely to be having a positive effect on absorption rates. However perhaps more interestingly, in locations where the largest amount of transactions have taken place in Q1, such as MBR City, it is clear there is a growing demand for more innovative living solutions.
Apartments: Quarter-on-Quarter movement: (–3%)
Prices of apartments in Downtown, Dubailand, Dubai Motor City and Dubai Silicon Oasis continued to remain resilient inQ1, with these locations witnessing no price movement since the previous quarter. Small declines were seen in the Views and Discovery Gardens with a 1% decrease from Q4 2018.
The highest declines were witnessed in International City, Dubai Sports City and Business Bay, all with a 7% decrease in prices since Q4 2018.Over 80% of the new stock delivered in 2018 was apartments, with a similar ratio set to be handed over in 2019. This might explain the consistently higher rate of price decline for apartments, as opposed to villas, given the greater level of supply on the market.
Villas: Quarter-on-Quarter movement: (–1%)
Market sentiment in the villa community of The Lakes remained the most positive, as there was no movement in prices from Q42018. In contrast to the previous quarter, The Meadows and Springs communities witnessed the highest price declines of4%. Small price declines were seen in Jumeirah Park with a 1%decrease, whilst Palm Jumeirah and Arabian Ranches both witnessed a 2% decline from Q4 2018.
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