Getting Real with the Real Estate Sector in Dubai for the Q2 of 2015

With the expansion of UAE set to continue for a sixth consecutive year this 2015, it’s safe to assume that the real estate sector will not buck the trend this year.

The real estate sector accounted for 13.3% of GDP last year, the third highest contributor. The Government of Dubai strongly contributed to this expansion, backing major developments including the new Al Maktoum International Airport and the extension of Dubai International Airport.

Apartments

The Dubai property market decelerated during Q2 2015, with average apartment sales prices falling across the city, matching that of Q1 2014. Experts have attributed this to the maturing of the market and correcting values of apartments. Transactions have risen, although not at the rate reflected by forecasts.

For prime apartments, it just keeps getting better. As average sales prices in Business Bay have raised gradually over the past few years, demand has remained constant. The district currently has more than 40 developments currently under way, with the majority expected to be finished and handed over in 2016 and 2017. In Downtown Dubai the view is different. Prices were 19% lower than that of the 2014 peak. However, during the second quarter of this year, demand has been steady and at a healthy level. Sales prices in Dubai Marina and Jumeirah Beach Residence (JBR) are declining but buyers’ interest are picking up. Palm Jumeirah sales prices are 12.5% lower now than at the 2014 peak. There are 20 projects currently are under development on the island with more on the way.

Villas

Villas have been experiencing falling sales prices for nine months now. This has increased buyers’ sentiment for this quarter, with transactions recorded in the villa segment starting to rise again.

Prices for prime villas in high-end developments within the Jumeirah Park, Jumeirah Islands, Emirates Hills and Arabian Ranches communities have kept increasing since late 2014. However, the prices in the first three areas declined in the second quarter, while sales prices at Arabian Ranches’ rose by 5%.

Among these prime communities, Arabian Ranches supply is the highest with more than 4,000 villas. The community is also the fastest growing. By 2018 Emaar, the developer will deliver nearly 2,500 new homes including the Mira Oasis, Lila, Azalea and Samara Rosa, and Rasha Villas sites.

SOURCE: Roots Land Real Estate