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While the sales prices of apartments are falling at a slower pace, rental rates, apparently, are reaching its lowest level with analysts prompting that confidence is now returning to Dubai’s real estate.
The property experts claim that the housing rents in most locations in the emirate either remained stagnant or posted a minor decline in the fourth quarter of 2019.
During the same period, sales prices of apartments and villas continued to decreease by 2 percent and 3 percent, respectively, but the declines were not as significant as in the previous quarter.
“The Dubai residential market in Q4 2019 is alluding to a more positive outlook for 2020, thanks to the slowdown of sales price declines and the levelling of rental rates,” said Chris Hobden, head of strategic consultancy at Chestertons Mena.
From October to December last year, the only location that showed upward price movements was , and this was mainly due to the delivery of new high-end units. During that period, rentals also remained flat in such areas as , , , , International City and The Views.
On the other hand, apartments in , and saw a 2 percent decline in rents, while rental declines averaged 3 percent in The Greens and
As for sales, the largest decline in the apartment prices (9 percent qarter-on- quarter) was registered in
Property sales prices stayed flat also in Business Bay, Dubailand, Dubai Marina and The Greens.
The only location that registered a price increase in the last quarter was The Views, where the sales price of property units went up to AED1,089 from AED1,044 in the previous quarter.
Sales and rental rates in Dubai have been on a downtrend in recent years, registering a 20 percent decline since 2014, largely due to an oversupply of new housing units. Some analysts have predicted that rental and sales figures will pick up only after 2020.
The real estate market is indeed going through a very challenging phase, and it will probably take about three years before things could pick up again, but the sentiment, however, is worse than the market. The actual market is better, experts say. Billions of dirhams worth of properties in Dubai are still being snapped up by buyers.
Dubai Land Department’s (DLD’s) latest official data revealed that developers managed to generate more sales last year than in 2018. The sales of villas, apartments and commercial spaces reached AED51 billion in 2019, up from AED38 billion a year earlier. The figures don’t include mortgage and land transactions.
Despite the challenges, property owners are still seeing decent rental yields. According to Chestertons, there are many communities in Dubai that continue to offer returns of between 6 percent and 9.5 percent, and these include Dubai Silicon Oasis, Jumeirah Beach Residence, Dubai Sports City, Business Bay and Palm Jumeirah.
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