The data confirms that 622 villas and 7,050 apartments were completed within the first quarter of the year in both the secondary residential and off-plan market.
According to new data from brokerage firm Luxhabitat, despite flattening in the overall market, secondary residential market transactions remained relatively stable in the first quarter of 2018.
The data confirms that 622 villas and 7,050 apartments were completed within the first quarter of the year in both the secondary residential and off-plan market.
Luxhabitat noted that the drop is likely due to the announcement that Dubai developers need their projects to reach 50 percent completion before declaring their properties for sale, as well as pay off all the costs related to land.
Property Monitor statistics show 80,000 units are scheduled to be completed in 2018, with 2,000 units each to be delivered in Downtown Dubai, Business Bay, Mohammed bin Rashid City and Jumeirah Village Circle.
Luxhabitat associate director Brigitte Tenbergen said, “We’re also seeing more extended post-handover payment plans, discounts and DLD waivers from developers.”
“What I perceive as general sentiment is that buyers are overwhelmed with the amount of projects and in no rush – they take their sweet time and are demanding discounts and waivers, as they are well aware that there is an oversupply of properties in the market.”
Sally Ann Ghai, another Luxhabitat associate director, said that “while it is true that the attraction of extended developer payment plans hook those buyers short of a 35 percent deposit for an AED 5 million plus home purchase, only a review by the Central Bank on borrowing rules will truly support a revival in the secondary market.”
Additionally, the Luxhabitat analysis found that the prime residential market in Q1 2018 totaled AED 5.3 billion ($1.44 billion), with secondary villa sale volumes far exceeding off-plan sales.
Ghai said, “For clients looking at a longer term investment, they may realize more value from a cooled and increasingly rational secondary market, with sellers now reality checked in their asking prices, compared to developers who are front loading pricing in most prime off-plan developments.”
“The question is whether off-plan can hold these values on delivery under weight of supply.”
