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TRANSCRIPT
AREPORT BY
DUBAI RESIDENTIAL PROPERTY TRENDS 2016PRICE SHIFTS, WHAT’S BEING BUILT AND WHO’S BUYING
&
CONT
ENTS Key Findings
Focus on Selected Communities
Introduction Danger of potential over supply
ImprovingTransparency Off Plan V Secondary
Market
Sales Marketin 2016 Prospects for 2017
Rental Marketin 2016
Contact Us andData Sources
1/PAGE 2 PAGE 24
PAGE 29
PAGE 35
PAGE 36
PAGE 37+38
PAGE 4
PAGE 5
PAGE 9
PAGE 22
6/
2/ 7/
3/ 8/
4/ 9/
5/ 10/
A dubizzle & JLL report2016
1.2016
2.
1/KEY FINDINGS
Rental and sale prices have remained largely unchanged over the past quarter as the Dubai residential market reaches the bottom of its current cycle.
While difficult to call the exact bottom of any market cycle until it starts to recover again, we believe the level of downside risk is limited and the Dubai residential market will move into the recovery stage during 2017.
This recovery is predicated on the expectation that economic growth in Dubai will be marginally higher in 2017 than in 2016.
Further improvements to the regulatory environment and transparency could positively impact the Dubai residential market in 2017.
Factors driving this predicted recovery include:-gradual recovery of oil prices in 2017
stronger confidence as investors recognise that the market is close to its cyclical troughcontinued government investment in hospitality, aviation, healthcare and other growth sectorsincreased employment and construction activity in the lead up to Expo 2020
A dubizzle & JLL report
20163.
CONTINUED.. Has the market bottomed out? Is it really a buyers’ market? Is this a time for buyers, be they investors or end-users, to grab the best deals before the market shifts upwards? Should tenants seek to purchase to avoid paying rent? What is the perception of the first-time homebuyer in the UAE, and who are they? Is the secondary property marketplace more favored or is off-plan property gaining in popularity?
To address some of these questions, dubizzle and JLL have come together to provide real estate stakeholders with a better understanding of the factors that have influenced the market over the past years and where the market is likely to head in 2017.
There is a general consensus that sale and rental prices have declined in Dubai during 2016, but it is equally clear that this decline has been far from uniform between segments and locations. There is far less consensus about what 2017 holds in store, with some suggesting a further decline, while others argue the market has already bottomed. Such disagreement is common when a market approaches a turning point as the precise bottom of a cycle is often only apparent with the benefitof hindsight…
INTRO-DUC-TION
20164.
2/
While moving into the upturn stage of its cycle in 2017, we do not expect the Dubai residential sector to experience a rapid increase in prices in 2017, with increases in most areas likely to remain in single digits.
The greatest threats to any recovery in 2017 would be a further slowdown in the Dubai economy or a major improvement in the materialization rate, which could lead to oversupply and a subsequent weakening of performance in some locations.
With over 30K units currently scheduled to complete in 2017, there is some concern the market could experience an oversupply that would negatively impact performance. We believe that several factors will reduce the actual delivery of units. These factors include increased construction costs and competition for resources as well as proactive measures being taken by developers who are phasing the release of units to avoid the possibility of oversupply.
With major tourism, healthcare and infrastructure projects progressing in the lead up to EXPO 2020, Dubai is creating other strong alternative income streams, alongside a better regulated real estate sector.
A dubizzle & JLL report A dubizzle & JLL report
20165.
dubizzle and JLL both feel strongly that the Dubai market would benefit from greater transparency which would allow both investors, or end-users and tenants to make more well-informed decisions. By consolidating their market data and co- authoring this report, we hope to contribute to improved transparency, which will not only help existing players, but also attract new investors to enterthe market.
In preparing this report, we have considered data from a number of credible sources including
dubizzle’s internal data warehouse for sale and rental askingprice evolution
JLL’s proprietary supply data
Third party data from Dubai Land Department (DLD), Dubai Economic Department (DED) andother sources
3/IMPROVING
20166.
IMPROVEDLEGISLATION45 years in the making, the UAE (and especially Dubai) has come a long way since its formation in creating a sustainable ecosystem to attract and retain a large expat community.
Post the 2008/9 global financial crisis, the government of Dubai, lead by His Highness Sheikh Mohammed Bin Rashid Al Maktoum, has taken several steps to shield the Emirate. These initiatives have played a key role in Dubai emerging as the most transparent market in the region as portrayed in successive editions of JLL’s Global Real Estate TransparencyIndex (GRETi.)
TRANSPARENCY
A dubizzle & JLL report A dubizzle & JLL report
20167.
RERA is established Strata Law Decree 43 introduces the New Rental Cap Law
Rent Dispute Settlement Committee established
New Mortgage Law is introduced
Transfer fees doubled from 2% to 4% to discourage flipping of properties
dubizzle publishes first property market trends infographic report due to identified user need for increased data transparency
Escrow law introduced Joint ownership law providing for creation of Home Owner AssociationsIntroduction of real estate
register maintained by the Dubai Land Department
Many of the legislative changes were made with an aim to encourage foreign direct investment by creating attractive property laws and a more robust judicial system. Dubai’s strengthened legislation over the past decade is testament to a city with a plan to create a strong and sustainable real estate sector capable of attracting high levels of foreign investment.
Leading developers prevent resale of off-plan property until buyers pay at least 40 to 50% of the price
dubizzle study reveals improved first-time homebuyer sentiment within the millennial segment
dubizzle identifies an increase in search volumes for properties for sale in mid-market/ affordable housing areas such as JVC, Dubai Land development and Al Furjan
Publication of UAE bankruptcy law
Dubai Economic Department study shows Dubai attracts AED 17.7 billion worth of FDI in the first six monthsof 2016
Decree 41 issued to regulate the Holiday Home segment and allow short-term leasing under the Department of Tourism and Commerce Marketing (DTCM) Dubai ranks sixth globally
on value of foreign direct investment (FDI)
JLL publishes new report drawing attention to shortage of affordable housing
20168.
2007 2010 2013 2014 2015 2016
A dubizzle & JLL report A dubizzle & JLL report
20169.
The Dubai residential market peaked in mid 2014. Over the past two years, sale prices have declined by around 15% and rentals by around 10%. This decline is, in many ways, part of a normal market cycle, with prices having increased at an unsustainable rate from2012 to 2014.
With a significant majority of Dubai expats preferring to rent rather than buy, rental prices have held up better than sales prices over the past two years. This has increased rental yields for investors and, in some cases, also resulted in a crossover as former tenants looked to purchase their own homes.
4/SALESMARKETIN 2016
DUBAI RESIDENTIAL SALE PRICE INDEX
201610.
WHO ARETHE BUYERS?After UAE nationals, Indian, Saudi, British, and Pakistani nationals topped the list of major buyers of Dubai real estate over the firsthalf of 2016.
UK investment in the Dubai real estate market fell from 9% in the first half of 2015 to 7% in the same period this year. Britain’s vote to leave the European Union in June this year is expected to further negatively impacted UK investment in Dubai. The Brexit vote caused a sharp fall (circa 20%) in the value of the GBP and negatively impacted UK investor interest in the UAE market, where prices are now comparatively higher.
One of the strengths of Dubai’s market is the diversified nature of demand, with the top 12 nationalities accounting for only 75% of all sales. This means the market is able to absorb a decline in sales from a particular nationality due to factors such as currency movements. A case in point would be Russian buyers who accounted for over 5% of all transactions in 2014 but have since fallen to less than 1%. Their place has been taken by increased activity from other key markets such as Saudi Arabia and Iran, along with more activity from Chinese andAfrican investors.
TOP 12 NATIONALITYOF BUYERS OF DUBAIREAL ESTATE 1H2016
VALUE OF TRANSACTIONS (IN AED MILLION)
300
225
150
75
0JAN JAN JAN JAN JAN OCT
2003 2005 2008 2010 2013 2016
A dubizzle & JLL report A dubizzle & JLL report
Source:REIDIN
UAE
14,523Value:
26%
3,172Value:Pakistan
6%
1,759Value:Iran
3%
3,969Value:UK
7%
7,272Value:India
13%
4,240Value:KSA
8%
1,518Value:Jordan
3%
1,216Value:Kuwait
2%
1,030Value:Lebanon
2%
1,374Value:Egypt
2%
1,024Value:Iraq
2%
1,187Value:Qatar
2%
% SPLIT Source:DLD
201611.
FIRST-TIMEHOMEBUYERS– THE MILLENNIALSENTIMENTAccording to the Dubai Statistics Centre, there were around 1.2 million expat millenials (those between the ages of 25 and 39) in the Emirate in 2015, accounting for about 48% of the total population of Dubai.
25% said that they intended to establish their own start-up or invest in a business of interest before they invested in buying a home. This brings to light the UAE’s vision of attracting and harbouring visionary leaders by creating an environment that supports a healthy start-up scene with supporting new business legislations, such as the recently approved bankruptcy law and the possible knock on effect on the commercial property sector, business centres in specific, building up to Expo 2020.
dubizzle conducted a third party research study on millennial expats and asked where (and if ) they would buy a property in the next 3 years. Of those who believed that purchasing a home in the near future was important, 44% said they planned to buy a home in the UAE, while 59% said they wanted to buy outside the UAE. The latter preferred to buy in their home country, as they weren’t sure how long they’d stay in the UAE. There was, also a crossover of millenials who were considering buying properties abroad as well as in the UAE while they continued to live in the UAE, which they regarded as an ideal base during the prime years of their careers.
201612.
ARAB EXPATS
ASIAN EXPATS
Partly as a result of the Arab spring, many Arab expats (from outside the GCC) purchased homes in Dubai as a store of wealth or a safe haven in an otherwise volatile region. According to the Dubai Land Department’s 2016 H1 report, Arab expats invested a total of AED 7 billion in 7,577 deals (Jordanians - 765 transactions, Egyptians - 710 transactions, Lebanese - 432 transactions). As for GCC countries, Saudi Arabia investment into Dubai real estate equated to AED 4.2 billionworth in H1.
On the contrary, millennial Asian expat first-time buyers (predominantly Indians) preferred to purchase their first property back home.
The more established Indian expatriates, those who already own property(s) at home, were planning to purchase homes in the UAE due to its convenient geographic proximity to their homeland, and the ideal business environment it provides for new entrepreneurs to set up shop. The Dubai Land Department’s 2016 H1 report states that Indians, after UAE locals, were the second largest segment of property investors, contributing AED 7.27 billion worth of transactions.
dubizzle’s research study confirms that the UAE remains the preferred choice for Arab millennial expats to purchase a property. 54% of our sample (of which 41% were Arab expats) stated that their country was not a safe place, was “risky” to invest in, and/or that they did not want to go back to their home countries to live long-term.
A dubizzle & JLL report A dubizzle & JLL report
201613.
201614.
Q3 Q3
Q3 Q3
Q3 Q3
Q4 Q4
Q4 Q4
Q4 Q4
Q1 Q1
Q1 Q1
Q1 Q1
Q2 Q2
Q2 Q2
Q2 Q2
Q3 Q3
Q3 Q3
Q3 Q3
2015 2015
2015 2015
2015 2015
2015 2015
2015 2015
2015 2015
2016 2016
2016 2016
2016 2016
2016 2016
2016 2016
2016 2016
2016 2016
2016 2016
2016 2016
962 978
928 1315
890 970
946 991
897 1212
868 1001
967 929
944 1250
875 970
938 985
925 1229
874 986
950 985
909 1217
855 986
CONTINUED..
ALL FIGURES ARE ASKING PRICES IN AED PER SQ FT
ALL FIGURES ARE ASKING PRICES IN AED PER SQ FT
ALL FIGURES ARE ASKING PRICES IN AED PER SQ FT
ALL FIGURES ARE ASKING PRICES IN AED PER SQ FT
ALL FIGURES ARE ASKING PRICES IN AED PER SQ FT
ALL FIGURES ARE ASKING PRICES IN AED PER SQ FT
A dubizzle & JLL report A dubizzle & JLL report
SALE PRICES TREND ANALYSIS
/MID-MARKETQ3 Q32015 2016TO
NUMBER OF SEARCHESON dubizzle
NUMBER OF SEARCHESON dubizzle
NUMBER OF SEARCHESON dubizzle
NUMBER OF SEARCHESON dubizzle
NUMBER OF SEARCHESON dubizzle
NUMBER OF SEARCHESON dubizzle
1.6M 1.9M
15M
1.7M7.1M
9.7M
PRICE DECREASE PRICE DECREASE
PRICE INCREASE PRICE INCREASE
DUBAILAND-MOTORCITY
JUMEIRAHVILLAGECIRCLE(JVC)
JUMEIRAHLAKETOWERS(JLT)
DUBAILAND-SPORTSCITY
ALFURJAN
APARTMENTS
APARTMENTS APARTMENTS
APARTMENTS APARTMENTS
JUMEIRAHVILLAGETRIANGLE(JVT)
VILLAS
Source:dubizzle
Source:dubizzle
201615.
201616.
Q3 Q3
Q3 Q3
Q3 Q3
Q4 Q4
Q4 Q4
Q4 Q4
Q1 Q1
Q1 Q1
Q1 Q1
Q2 Q2
Q2 Q2
Q2 Q2
Q3 Q3
Q3 Q3
Q3 Q3
2015 2015
2015 2015
2015 2015
2015 2015
2015 2015
2015 2015
2016 2016
2016 2016
2016 2016
2016 2016
2016 2016
2016 2016
2016 2016
2016 2016
2016 2016
1811 1423
2497 1487
1881 1160
1534 1377
2302 1396
1867 1125
1714 1393
2407 1390
1919 1117
1698 1393
2345 1399
1833 1109
1626 1364
2326 1367
1769 1107
A dubizzle & JLL report A dubizzle & JLL report
ALL FIGURES ARE ASKING PRICES IN AED PER SQ FT
ALL FIGURES ARE ASKING PRICES IN AED PER SQ FT
ALL FIGURES ARE ASKING PRICES IN AED PER SQ FT
ALL FIGURES ARE ASKING PRICES IN AED PER SQ FT
ALL FIGURES ARE ASKING PRICES IN AED PER SQ FT
ALL FIGURES ARE ASKING PRICES IN AED PER SQ FT
CONTINUED..
NUMBER OF SEARCHESON dubizzle
NUMBER OF SEARCHESON dubizzle
NUMBER OF SEARCHESON dubizzle
NUMBER OF SEARCHESON dubizzle
NUMBER OF SEARCHESON dubizzle
NUMBER OF SEARCHESON dubizzle
24M 694K
3.8M
1.5M
7.9M
8.1M
PRICE DECREASE PRICE DECREASE
PRICE INCREASE PRICE INCREASE
SALE PRICES TREND ANALYSIS
/PREMIUMQ3 Q32015 2016TO
DUBAIMARINA
DOWNTOWNDUBAI
PALMJUMEIRAH
EMIRATESLIVING-SPRINGS
APARTMENTS
APARTMENTS
APARTMENTS
JUMEIRAHISLANDS
VILLAS
VILLAS
VILLAS
EMIRATESLIVING-MEADOWS
Source:dubizzle
Source:dubizzle
201617.
SALE TRANSACTIONS OVERLAY2016
18.A dubizzle & JLL report A dubizzle & JLL report
37
72
41
23
51
25
23
26
51
18
24
80
12
16
35
Q3
Q3
Q3
Q4
Q4
Q4
Q1
Q1
Q1
Q2
Q2
Q2
Q3
Q3
Q3
2015
2015
2015
2015
2015
2015
2016
2016
2016
2016
2016
2016
2016
2016
2016
*COMPLETED SALES
*COMPLETED SALES
*COMPLETED SALES
113
5841078
228
T O T A L
T O T A L
T O T A L
JUMEIRAHVILLAGETRIANGLE
ALFURJAN/DISCOVERYGARDENS/JAF
JUMEIRAHVILLAGECIRCLE
(JVT)
(JVC)
VILLAS
APARTMENTS
Source:DLD
CONTINUED..
VILLAS
Q3
Q3
Q3
Q3
Q4
Q4
Q4
Q4
Q1
Q1
Q1
Q1
Q2
Q2
Q2
Q2
Q3
Q3
Q3
Q3
2015
2015
2015
2015
2015
2015
2015
2015
2016
2016
2016
2016
2016
2016
2016
2016
2016
2016
2016
2016
23
174
136
46
19
628
279
18
391
161
44
20
274
219
19
194
106
38
49
197
175
36
178
155
62
21
245
264
32
142
124
29
32
211
237
*COMPLETED SALES
* COMPLETED SALES REFERS TO COMPLETED PROPERTIES * COMPLETED SALES REFERS TO COMPLETED PROPERTIES
*COMPLETED SALES
*COMPLETED SALES
*COMPLETED SALES
OFF PLAN SALES
OFF PLAN SALES
OFF PLAN SALES
JUMEIRAHVILLAGETRIANGLE
JUMEIRAHVILLAGECIRCLE
(JVT)
(JVC)
128
682
1079
219
141
1174
1555
T O T A L
T O T A L
T O T A L
T O T A L
APARTMENTS
APARTMENTS
APARTMENTS
APARTMENTS
DUBAILAND-MOTORCITY
DUBAILAND-SPORTSCITY
Source:DLD
/MID-MARKETQ3 Q32015 2016TO
29 5 29 602 413OFF PLAN SALES
201619.
201620.A dubizzle & JLL report A dubizzle & JLL report
SALE TRANSACTIONS OVERLAYCONTINUED..
101
8
127
18
75
14
109
0
90
16
Q3
Q3
Q4
Q4
Q1
Q1
Q2
Q2
Q3
Q3
2015
2015
2015
2015
2016
2016
2016
2016
2016
2016
*COMPLETED SALES
*COMPLETED SALES
56
502
T O T A L
T O T A L
JUMEIRAHISLANDS
EMIRATESLIVING-SPRINGS &MEADOWS
VILLAS
VILLAS
41 23 38 27 26Q3 Q4 Q1 Q2 Q3
2015 2015 2016 2016 2016
*COMPLETED SALES
155T O T A L
PALMJUMEIRAH
VILLAS
Source:DLD
* COMPLETED SALES REFERS TO COMPLETED PROPERTIES * COMPLETED SALES REFERS TO COMPLETED PROPERTIES
Q3 Q4 Q1 Q2 Q32015 2015 2016 2016 2016
*COMPLETED SALES
OFF PLAN SALES
179
374
185
261
154
358
170
282
107
781
DOWNTOWNDUBAI
7952056
T O T A L
Q3 Q4 Q1 Q2 Q32015 2015 2016 2016 2016
*COMPLETED SALES
OFF PLAN SALES
396
200
439
129
401
154
447
331
358
301
DUBAIMARINA
20411115
T O T A L
APARTMENTS
APARTMENTS
Q3 Q4 Q1 Q2 Q32015 2015 2016 2016 2016
*COMPLETED SALES
OFF PLAN SALES
85
278
89
168
93
45
131
100
92
46
490637
T O T A L
APARTMENTS
PALMJUMEIRAH
/PREMIUMQ3Q3 2015 2016TO
Source:DLD
201621.
201622.
RENTAL MARKET5/IN 2016Despite the leveling off of the market, there remains a strong interest in buying real estate in Dubai, however, the majority of expatriates continue to prefer to rent rather than owntheir homes.
The property clock illustrates where JLL estimates each prime market is within its individual rental cycle at the end of the relevant quarter.
NOTE
As a result, rents have fallen far less than prices in the current cycle. JLL’s property clock shows the rental market peaked during 2014 and has fallen for the past 18 months.
DUBAI PRIME RENTAL CLOCKRESIDENTIAL MARKET (Q3)
RENTAL GROWTHSLOWING
RENTAL GROWTHACCELERATING
RENTSBOTTOMING OUT
RENTSFALLING
2014
2008
2015
2009
2010
2011
20162012
2013
CONTRIBUTING
SALE PRICE SHIFTS
TO THE DECLINE INPRICES IN 2016Slowdown in the UAE economy (GDP growth went from 4.0% in 2015 to 2.3% in 2016.) This was largely due to the decline in oil prices (which almost halvedin 2015).
Lower oil prices have also resulted in less investment from surrounding GCC nations – a major source of capital for the Dubai residential market.
Ample levels of new supply anticipated despite developers holding some projects offthe market.
Continued strengthening in value of the US dollar has made Dubai less attractive to manyoverseas investors.
Restrictions on mortgages as part of the UAE Government’s successful attempt to cool the housing market and prevent another bubble from developing (as it had from 2006 to 2008).
A dubizzle & JLL report A dubizzle & JLL report
MARKET LEVELING OFF IN 2016
Source:JLL
Source:dubizzle
Dubai Land - Motor CityApartments
Dubai Land - Sports CityApartments
Jumeirah Village CircleApartments
Jumeirah Village TriangleVillas
Al Furjan Apartments
Jumeirah Lake TowersApartments
Dubai MarinaApartments
Palm JumeirahApartments
Downtown DubaiApartments
Jumeirah Islands Villas
Emirates Living - SpringsVillas
Emirates Living - MeadowsVillas
3000
2250
1500
750
Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 20160
SALE
PRI
CE P
ER SQ
FT
201623.
SUMMARY ON 2016FOCUS ON6/
RENTAL MARKET:SELECTEDCOMMUNITIES
Data from dubizzle shows that average asking rentals across Dubai declined by 4% over the past year, but that over the third quarter of 2016, rental levels remained largely unchanged, leading us to conclude that the rental market is bottoming out. While it is always hard to recognize the precise bottom of a cycle until after the market recovers again, we feel that there is limited further downside potential in rentals from this point and that average rentals are likely to increase again during 2017.
This data shows that asking rentals have experienced a Y-O-Y decline of 2% for 1BR apartments, 7% for 2BR apartments, and 3% for 3BR apartments. It is not surprising that actual rental prices have declined by more than asking rental prices, as landlords are always reluctant to adjust asking prices downwards in a falling market and often prefer to negotiate deals with tenants at levels below their asking rentals.
Trends in asking sale prices also provide a similar picture of the market poised close to the bottom of its current cycle with no movement in Q3 . 2016
201624.
Data from dubizzle suggests that the mid-market sector has seen a more modest decline in asking sales price per/sqft (-2%) than the premium housing communities (-6%) over the past year. Al Furjan apartments were one of the few property types to experience an increase in sales price per sq.ft. of 3%. Jumeirah Village Triangle villas saw an increase of 1%. Both now selling at approximately AED 985.5/sq.ft.
On the other hand, asking sale price/sqft of apartments in Dubai Marina experienced the biggest dip of 15% Y-O-Y but in Palm Jumeirah apartment asking sales prices decreased by only about 1%.
A dubizzle & JLL report A dubizzle & JLL report
201625.
201626.
CONTINUED..
ALL NUMBERS ARE ASKINGRENTALS IN AED PER ANNUM
Q3 Q32015 2016TO
A dubizzle & JLL report A dubizzle & JLL report
ALL NUMBERS ARE ASKINGRENTALS IN AED PER ANNUM
ALL NUMBERS ARE ASKINGRENTALS IN AED PER ANNUM
ALL NUMBERS ARE ASKINGRENTALS IN AED PER ANNUM
ALL NUMBERS ARE ASKINGRENTALS IN AED PER ANNUM
ALL NUMBERS ARE ASKINGRENTALS IN AED PER ANNUM
1BR
1BR
1BR
1BR
1BR
1BR
1BR
1BR
1BR
1BR
1BR
1BR
1BR
1BR
1BR
2BR
2BR
2BR
2BR
2BR
2BR
2BR
2BR
2BR
2BR
2BR
2BR
2BR
2BR
2BR
3BR
3BR
3BR
3BR
3BR
3BR
3BR
3BR
3BR
3BR
3BR
3BR
3BR
3BR
3BR
80K
70K
68K
80K
70K
68K
80K
68K
69K
80K
68K
68K
80K
68K
65K
120K
105K
105K
122K
100K
100K
120K
100K
95K
125K
105K
95K
120K
95K
95K
165K
150K
135K
160K
140K
145K
160K
140K
145K
160K
145K
120K
160K
135K
125K
Q3
Q3
Q3
Q4
Q4
Q4
Q1
Q1
Q1
Q2
Q2
Q2
Q3
Q3
Q3
2015
2015
2015
2015
2015
2015
2016
2016
2016
2016
2016
2016
2016
2016
2016
1BR
1BR
1BR
1BR
1BR
1BR
1BR
1BR
1BR
1BR
2BR
2BR
2BR
2BR
2BR
2BR
2BR
2BR
2BR
2BR
3BR 3BR
3BR
3BR
3BR 3BR 3BR
3BR
3BR
3BR
3BR
3BR
3BR
3BR
3BR
90K
80K
90K
77K
88K
88K
85K
75K
85K
80K
130K
143K
125K
115K
122K
110K
120K
105K
120K
115K
170K 160K
162K
135K
173K 175K 175K
160K
140K
160K
135K
155K
130K
160K
135K
Q3
Q3
Q3
Q4
Q4
Q4
Q1
Q1
Q1
Q2
Q2
Q2
Q3
Q3
Q3
2015
2015
2015
2015
2015
2015
2016
2016
2016
2016
2016
2016
2016
2016
2016
RENTAL PRICE TRENDS ANALYSIS
MID-MARKET
DUBAILAND-MOTORCITY
JUMEIRAHVILLAGECIRCLE(JVC)
JUMEIRAHLAKETOWERS(JLT)
DUBAILAND-SPORTSCITY
ALFURJAN
APARTMENTS
APARTMENTS APARTMENTS
APARTMENTSAPARTMENTS
JUMEIRAHVILLAGETRIANGLE(JVT)
VILLAS
Source:dubizzle
Source:dubizzle
PRICE DECREASE PRICE DECREASEPRICE INCREASE PRICE INCREASEPRICE IS NEUTRAL PRICE IS NEUTRAL
201627.
201628.
CONTINUED..
A dubizzle & JLL report A dubizzle & JLL report
ALL NUMBERS ARE ASKINGRENTALS IN AED PER ANNUM
ALL NUMBERS ARE ASKINGRENTALS IN AED PER ANNUM
ALL NUMBERS ARE ASKINGRENTALS IN AED PER ANNUM
ALL NUMBERS ARE ASKINGRENTALS IN AED PER ANNUM
ALL NUMBERS ARE ASKINGRENTALS IN AED PER ANNUM
ALL NUMBERS ARE ASKINGRENTALS IN AED PER ANNUM
RENTAL PRICES TREND ANALYSIS
/PREMIUMQ3 Q32015 2016TO
DUBAIMARINA
DOWNTOWNDUBAI
PALMJUMEIRAH
1BR
1BR
1BR
1BR
1BR
1BR
1BR
1BR
1BR
1BR
1BR
1BR
1BR
1BR
1BR
2BR
2BR
2BR
2BR
2BR
2BR
2BR
2BR
2BR
2BR
2BR
2BR
2BR
2BR
2BR
3BR
3BR
3BR
3BR
3BR
3BR
3BR
3BR
3BR
3BR
3BR
3BR
3BR
3BR
3BR
100K
115K
145K
100K
115K
145K
95K
115K
146K
95K
113K
145K
95K
115K
150K
150K
170K
179K
145K
169K
185K
140K
170K
185K
140K
170K
180K
140K
165K
180K
205K
285K
230K
205K
280K
235K
210K
280K
250K
205K
276K
235K
200K
280K
230K
Q3
Q3
Q3
Q4
Q4
Q4
Q1
Q1
Q1
Q2
Q2
Q2
Q3
Q3
Q3
2015
2015
2015
2015
2015
2015
2016
2016
2016
2016
2016
2016
2016
2016
2016
JUMEIRAHISLANDS
EMIRATESLIVING-SPRINGS
EMIRATESLIVING-MEADOWS
3BR
3BR
3BR
3BR
3BR
3BR
3BR
3BR
3BR
3BR
3BR
3BR
3BR
3BR
3BR
250K
190K
230K
248K
180K
230K
180K
180K
225K
255K
180K
225K
320K
180K
230K
Q3
Q3
Q3
Q4
Q4
Q4
Q1
Q1
Q1
Q2
Q2
Q2
Q3
Q3
Q3
2015
2015
2015
2015
2015
2015
2016
2016
2016
2016
2016
2016
2016
2016
2016
APARTMENTS
APARTMENTS
APARTMENTS
VILLAS
VILLAS
VILLAS
Source:dubizzle
Source:dubizzle
PRICE DECREASE PRICE DECREASEPRICE INCREASE PRICE INCREASEPRICE IS NEUTRAL PRICE IS NEUTRAL
201629.
DANGER OFFUTUREOVERSUPPLY?
There has been an average of 14,000 units completed per annum across the Dubai residential market over the past 6 years ( ). This suggests the market can absorb between 10 and 15 k of additional units in response to continued population growth and demographic changes.
While developers are currently indicating that they plan to complete around 30,000 units in 2017, recent history would suggest that not all of these unitswill materialize. Developers in Dubai have historically been over ambitious in terms of delivery, with only 35% of the units scheduled for completion over the past 5 years actually being delivered within their scheduled year of completion.
We see little likelihood of an improved rate of materialization in 2017, with a number of the planned deliveries likely to be delayed. While a negative for developers’ cash flows and the expectations of purchasers, the low level of materialization is likely to be a positive for the overall market, as it will ensure that the potential oversupply of units will be avoided.
201630.
7/
394 409 425 434 449 456467
1130 16
2
478508
523525
RESIDENTIAL SUPPLY
Completed (thousand units)
Under Contruction(thousand units)
2010 201420122011 2015 2016 2017 2018 2019 20202013 Construction delays due to material shortages or competitionfor resources.
Delays in obtaining approvals and statutory permits.
Lack of financial penalties for delayed completion.
Contractual disputes between developers and contractors.
Rescheduling of projects by developers to avoid floodingthe market.
REASONS FOR
LOW LEVEL OFMATERIALIZATION ARE
PROJECT DELAYS ANDTHE CORRESPONDING
VARIED AND INCLUDE:-
A dubizzle & JLL report A dubizzle & JLL report
2010-2016
Source:JLL
201631.
UNITSCOMPLETED
UNITSCOMPLETED
201632.
CONTINUED..
KEY COMMUNITIES-RECENT COMPLETIONS AND FUTURE SUPPLY
A dubizzle & JLL report A dubizzle & JLL report
335
1042
2312
416
320
1987
987
200
109821
1766
1191
1206
358
1710
1176
798
379
430
0
0
0
0
0
0
0
0
2011
2011
2011
2011
2011
2015
2015
2015
2015
2015
2013
2013
2013
2013
2013
2012
2012
2012
2012
2012
2016
2016
2016
2016
2016
2014
2014
2014
2014
2014
Al Furjan
Burj DubaiDowntown
DubaiMarina
Dubai Sports City
JLT
1265*Total Units
9281*Total Units
26186*Total Units
7288*Total Units
12227*Total Units
0 0 0
31
23992760
1593
250
84
1092 713 50014
216
680
192 203
0 0 0 0
0 00
0 0
0
2011
2011
2011
2011
2015
2015
2015
2015
2013
2013
2013
2013
2012
2012
2012
2012
2016
2016
2016
2016
2014
2014
2014
2014
JumeirahVillage Circle
JumeirahIslands
JumeirahVillage
Triangle
PalmJumeirah
851*Total Units
8520*Total Units
2273*Total Units
8617*Total Units
Source:JLL
Source:JLL
* TOTAL UNITS REFER TO UNITS DELIVERED SINCE THE LAUNCH OF THE COMMUNITY, EVEN PRIOR TO 2011. * TOTAL UNITS REFER TO UNITS DELIVERED SINCE THE LAUNCH OF THE COMMUNITY, EVEN PRIOR TO 2011.
201633.
UNITS UNDERCONSTRUCTION
0
201634.
Over the next 3 years Jumeirah Village Circle will see significant development with 2,200 units under construction up until 2019. Demand is growing for more affordable units in JVC and neighbouring communities within Dubai Land which offer better value for money and larger units than in locations closer to the coast.**
The newest area to emerge over the past year has been Dubai South, where 1,600 units are currently scheduled to be completed by 2020. More residential projects are expected to be announced in this location in 2017, as preparation for the Expo 2020 picks up momentum.
Most of the upcoming residential supply in the selected communities will be in the form of apartments. Even in communities that are traditionally mostly villas, such as Al Furjan, more apartments than villas are expected to be completed in the next few years.
The Y-O-Y increase in residential supply across the selected communities from 2017 to 2019 averages to 4% p.a. compared to an average of 3% p.a. in previous years. However, not all of this potential supply is likely to materialize as developers might phase the release of projects in line with demand, as they have in the recent years.
Future supply is highest in the Marina and Downtown areas.While there remains stronginterest in these prime locations, this supply will provide buyers with more choice and may restrict the potential for prices to increase in 2017. However, Dubai Marina still remained dominant in popularity with 24 million searchesmade by users in the last quarter.
A dubizzle & JLL report A dubizzle & JLL report
1BR/COMMUNITYAVERAGE SIZE OF
671 651
313
158
3300
1196
455
752 2772
18 1150
544
10972
0
0
0
2016
2016
2016
2016
2011
2016
2011
2016
2016
2017
2017
2017
2017
2012
2017
2012
2017
2017
Al Furjan
JLT
DubaiMarina
1322Total Units
3613Total Units
158Total Units
1196Total Units
455Total Units
3524Total Units
1168Total Units
544Total Units
181Total Units
DowntownDubai
DubaiSports City
JumeirahVillage
Trianlge
DubaiSouth
PalmJumeirah
JumeirahVillage Circle
Source:JLL
854 864 895 910 914 930 1052 1263DUBAI MARINA JUMEIRAH LAKE
TOWERSAL FURJAN DOWNTOWN
DUBAIJUMEIRAH VILLAGECIRCLE
DUBAI LAND-SPORTS CITY
DUBAI LAND-MOTOR CITY
PALM JUMEIRAH
APARTMENTS
PREMIUMMID-MARKET
201635.
OFF-PLAN VS.8/
9/SECONDARY MARKET-WHICH ONE ISFAIRING BETTER?Transactions of completed units have declined significantly over the past year. There were more than 11,200 existing apartments sold across Dubai in the 9 months to September 2015. Over the same period in 2016, this figure fell to around 8,100 apartments (a fallof around 30%).
Sales of off-plan units have also declined over the past year, but at a slower rate than that of existing stock. Across Dubai, 14,500 off-plan units were sold over the 9 months to September 2015, with this total falling to around 11,900 units in the same 9-month period of 2016 (representing a declineof around 18%.)
Off-plan sales within the selected communities have held up much better than the overall market,with the total number sold increasing marginally from 4,900 between Jan - Sept 2015, to around 5,200 in the corresponding period in 2016.
The level of off-plan unit sales increased significantly Y-o-Y in mid-market communities such as Jebel Ali First (JAF), Al Furjan, Discovery Gardens, Dubai South, and Jumeirah Village Triangle. Off-plan transactions in premium communities remained high in areas such as Downtown Dubai, JLT, Jumeirah Park and Jumeirah Islands, but fell compared to 2015 levels in Dubai Marina and Palm Jumeirah.
201636.
PROSPEC TS FOR2017Rental and sale prices have remained largely unchanged in the selected communities and the overall market over the past quarter as the market reaches the bottom of its current cycle.
We believe that the market will begin to recover during 2017 due to the following factors:-
While moving into the upturn stage of its cycle in 2017, we do not expect the Dubai residential sector to experience a rapid increase in prices in 2017, with increases in most areas likely to remain in single digits.
The greatest threats to this recovery in 2017 would be a further slowdown in the Dubai economy (which is currently forecast to increase by slightly more in 2017 than in 2016), or a major improvement in the materialization rate which could lead to oversupply and a subsequent weakening of performance in some locations.
Gradual recovery of oil prices
Stronger confidence as investors recognise market is close to cyclical trough.
Continued government investment in hospitality, aviation, healthcare and other growth sectors
Increased construction activity in lead up to Expo 2020
Further improvements to regulatory environment and transparency of real estate market
A dubizzle & JLL report A dubizzle & JLL report
201637.
201638.A dubizzle & JLL report A dubizzle & JLL report
DATA
SOUR
CES
CONT
ACT U
SDATA SOURCED FROMFOR QUESTIONS ANDINQUIRIES ON THEREAL ESTATE MARKET, PLEASE CONTACT:
DATA REFERENCEDAND ANALYZEDY-O-Y (2016-2015) Sale & Rent Price data for key communities (in the affordable & premium housing segment)
Y-O-Y residential supply trends
Y-O-Y volume of sales & RE transaction values
Health of the rent and sale property market & factors that affect the prices
Millennial buyer andtenant sentiment
Supply trends and key communities
dubizzle
From dubizzle:
From JLL:
Dubai Land Department (DLD), and Dubai EconomicDepartment (DED) Dubai Land Department (DLD)Published reports onwww.dubailand.gov.ae
Third party data from REIDIN, Property Monitor andother sources
Type:Sale and Rent asking prices Average Property SizesQuarterly Search Volumes
Ann BoothelloSenior Product Marketing [email protected]
Craig Plumb Head of [email protected]
Kathryn AthreyaHead of Marketing & [email protected]
Rana [email protected]
For media inquiries,please contact:
OrOr
Abdallah TouqanDirector PR, Communications & Events dubizzle [email protected]
Grayling [email protected]
Type:Proprietary Supply Data
Exclusive Data Collaboration Partner: JLL
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