12 Expert opinions on Dubai's real estate market in 2019

We asked a selection of agents, developers, property data analysts and portals. Here's what they have to say:

09 Jan 2019, words by Aneesha Rai in The Market

Andrew Cleator, Sales Director at Luxhabitat

With prices dropping and some really great opportunities in place, we asked various experts in the Dubai real estate industry to weigh in with their opinions about what to expect from the Dubai real estate market in 2019. Here's what they have to say:

what the property data analysts say

OZAN DEMIR, REIDIN

Analysts anticipate that the real estate market may decline further in 2019 as well due to the influx of new residential units unless announcement of government spending and new regulations creates an increase in demand post this year or early 2019.

- Ozan Demir, Director- Operations & Research, REIDIN

The Dubai real estate market had continued to decline further in 2018 owing to the addition of new residential units coupled with low economic growth, strong USD, and a resultant drop in consumer spending. Since the beginning of the year, prices of sales and rent in the apartment segment have fallen by 7% and 9% respectively. In the villa segment prices of sales and rent have fallen by 7% and 5% respectively. 

In 2017, the Off-Plan segment had a bumper performance and was responsible for the real estate market momentum in Dubai. Last year, off-plan transactions contributed to around 64% to the total sales transactions in Dubai, fast forward one year the contribution has fallen to 55%. Even during this year’s Cityscape Global Event, we saw a limited number of new launches, as most developers were focusing on selling their existing inventories.

In term of supply, around 22,000 residential units have so far entered the Dubai Real Estate market this year. A surge of supply is expected to affect the Dubai Residential market as the city prepares for the Expo 2020. As per announcements by developers, around 50,000 units are expected to enter the market in 2019 (the actual number of units to be materialized will be lower). 

Earlier this year the UAE cabinet approved the largest federal budget in recent times (AED 60.3 Billion), with more than half of the total budget being allocated to education and social development. The increase in government spending coupled with various new measure and regulations such as 10-year residence visas for certain investors and specialists, retiree Visa, reduction of market fees for businesses will be a positive boost to the real estate sector.

The large discrepancy between the announced and delivered stock has been a historical trend in Dubai and is helping developers address oversupply concerns by aligning demand and delivering products at realistic prices and also keeping the market stable. However, analysts anticipate that the real estate market may decline further in 2019 as well due to the influx of new residential units unless announcement of government spending and new regulations creates an increase in demand post this year or early 2019.

- Ozan Demir, Director - Operations & Research, REIDIN

Moe Abeidat, Property Monitor

Dubai's property market can only become more robust.

- Moe Abeidat, Chief Technology Officer at Property Monitor

"As we enter a new year, the question for many stakeholders in Dubai’s property market is: Will this year see a continued fall in prices, or will 2019 be the year prices stabilise? The short answer is; both. How do we know this? Data. 

Property Monitor’s data-driven analyses of the market have proven that information supply is indispensable to providing stakeholders with not just answers, but key market insights. Only when stakeholders are provided accurate, transparent information, can they make informed decisions. 

Property Monitor’s latest data indicates that Dubai’s real estate market will continue along its path of price correction going into Q1 of 2019. This is congruent with an annual decline in house prices, particularly in communities such as Arabian Ranches, Emirates Living, and Jumeirah Islands, where house prices have declined by more than 7% on average. This changes the equation favourably for resident families keen to purchase properties, instead of renting in these areas. Increased supply also means prospective purchasers have more options overall. 

Maturing markets offer significant growth opportunities, and we are confident that Dubai’s real estate sector will track positively in 2019. With increasingly proactive measures being implemented by the government, from new legal framework to financial regulations such as the proposed mortgage law, Dubai’s property market can only become more robust. The availability and distribution of accurate market analytics for all stakeholders from partners like Property Monitor is vital to shaping this continued transformation."

- Moe Abeidat, Chief Technology Officer, Property Monitor

What the agents say

ANDREW CLEATOR, Sales Director of LUXHABITAT

Key drivers to positively affect the market in 2019 include the current interest from international buyers and institutional investors especially from China.

- Andrew Cleator, Sales Director

"In my opinion, 2019 will continue to be a buyers market with great opportunities for both investors and end users alike. Saying that price reductions have already started to wane with some areas showing signs of stabilising. 

For sure this year we will see even more bullish developer sales incentives being offered. Last year we witnessed developers offering DLD fee waivers, free initial period service charges and very attractive post completion payment plans. The latter was partly due to the UAE central banks reluctance to increase the mortgage loan to value ratio, but I strongly believe this will be addressed in the coming months as part of the current government stimulus plan. 

Other key drivers to positively affect the market in 2019 include the current interest from international buyers and institutional investors especially from China. 

In addition, the government has recently been strengthening diplomatic and international business ties with many countries to bolster both tourist and population numbers which is a must. This for sure helped the Emirati passport recently became the most powerful in the world." - Andrew Cleator, Sales Director at Luxhabitat.

Yasin Valimula A.K.A. Mr Palm Jumeirah, Keller Williams

Prices have continued to decline and will keep doing so into 2019 with a bottoming out phase Q3 / Q4 2019.

- Yasin Valimulla, Associate Partner at Keller Williams

"2018 like the previous 2 years has been very challenging especially within the secondary market, the off plan has also stabilized in terms of sales transactions. Developers giving endless incentives such as post-handover payment plans, no DLD fees, No commissions and free service charges means clients are now more inclined with buying brand new places through the developers. 

Prices have continued to decline and will keep doing so into 2019 with a bottoming out phase Q3 / Q4 2019. Although some areas such as the Palm will bottom out sooner with prices now being at 2009 levels. Different areas in Dubai will experience different % in decline with some fairing better than others. Areas with a large inventory in the pipeline could witness declines going into 2020. 

Savvy investors are picking up some great deals within the established Dubai communities with motivated sellers. The rental market will be similar in nature to the sales forecast." 

- Yasin Valimulla, Associate Partner at Keller Williams

Mario Volpi, Engels & Voelkers

The post-handover payment plan on ready developer stock is not a new phenomenon, but in 2019 I see these becoming more creative with additions to the length of time a developer will add on to the plan.

- Mario Volpi, Sales and Leasing Manager, Engels & Voelkers

As competition heats up to entice the real estate buyer, I believe the trend for 2019 will come in the form of two inter-connecting subjects. 

1) Increased post-handover payment plans. 

2) Rent to own schemes. 

The post-handover payment plan on ready developer stock is not a new phenomenon, but in 2019 I see these becoming more creative with additions to the length of time a developer will add on to the plan. Already, they are reaching 5 to 7 years but I believe next year will see more plans extended to 10 years. 

More and more tenants hope to take the plunge of home ownership but they still struggle to raise the required deposit. So unless the central bank lowers the deposit requirement from 25%, we will also see more rent to own schemes, where a buyer can rent a property for a period of time, and at the end of that period, will have raised the required deposit as rent, to then go on and buy the property they are living in via a mortgage.

- Mario Volpi, Sales & Leasing Manager at Engels & Voelkers

What the developers say

Ahmad Al Matrooshi, Emaar Properties

One of the key trends of Dubai's property sector in 2019 will be the continued increase in international investor interest.

“One of the key trends of Dubai’s property sector in 2019 will be the continued increase in international investor interest. With Dubai offering one of the most competitive price points for premium property compared to global cities, the long-term return on investment and rental yields are attractive for global investors. The quality of life in the city, the world-class infrastructure, access to premium education and healthcare amenities, and the growth of the economy are all positive factors influencing global investments in Dubai’s property sector. With residences to be handed over in Dubai Creek Harbour, Dubai Hills Estate and Emaar South, among other developments, demand for world-class residences in trendy neighbourhoods will also gain traction. Investors are increasingly discerning about the long-term return from their investment as well as the quality of life offered by the integrated communities – value propositions that Emaar offers.”

- Ahmad Al Matrooshi, Managing Director, Emaar Properties

cyrus engineer, shapoorji pallonji

There might not be a meteoric rise in the prices and consumption but 2019 is surely going to be a better year compared to the last 2 years.

- Cyrus Engineer, Managing Director, Shapoorji Pallonji International Property Developers

According to me 2017 and 2018 have been pretty much lower years for real estate and we are almost at the bottle of the barrel in terms of real estate prices.

In this particular quarter of the year, we can see a rebound in terms of sentiment, actual transaction and enquiries as people now understand that the prices are at an all-time low and from here it is only going to get better. There is also a lot of capital demand from a geo-regional perspective and Dubai is seen as a safe investment haven, with a lot of regional players investing here. 

There is also a lot of governmental initiative aiming to upgrade the infrastructure of Dubai, which is fuelling the need for people to come to Dubai. This is resulting in an increase in the population of the city, which is further resulting in the increase in the latent demand for residential and commercial real estate. 

Right now, we can also see a shift in terms of oil prices, which is a healthy sign for the GCC and the UAE specifically. An uptick in oil prices will definitely see a commensurate increase in the demand for Dubai real estate.

There might not be a meteoric rise in the prices and consumption but 2019 is surely going to be a better year compared to the last 2 years.

- Cyrus Engineer, Managing Director at Shapoorji Pallonji International Property Developers

Mohammed Hmeid, Omniyat

The sales momentum of the real estate industry will continue to increase throughout 2019.

- Mohammed Hmeid, Marketing Director, Omniyat

The sales momentum of the real estate industry will continue to increase throughout 2019. Buyers will continue to refine their property selection criteria based on key factors such as location, developer reputation, efficiency and functionality of spaces along with excellent facilities and amenities. 

Developers will upgrade their current portfolio of projects and remain focused on designing innovative developments to meet the client’s increasing list of demands. The market has evolved to attract the end user's attention by providing a more bespoke and personalized sales experience. 

Refined materials, signature design and well-managed facilities come with a premium price, so developers will remain aggressive in offsetting this gap by offering flexible payment plans as well as wavering the usual fees that come with property purchase.

- Mohammed Hmeid, General Manager - Sales and Marketing at Omniyat

Abdulla Bin Sulayem, Seven Tides International

Abdulla Bin Sulayem, CEO, Seven Tides
As we look ahead to 2019, I would say competition will remain one of the biggest challenges facing developers.

In the real estate market, there remains plenty to be optimistic about as the UAE ramps up its preparations to host the Expo 2020. 

Dubai alone is expecting more than 25 million visitors by 2020, so it will be a busy 12 months ahead, especially with the development of the Expo site, Dubai World Central and the Dubai South area, where innovative value-based market propositions will be key. 

As we look ahead to 2019, I would say competition will remain one of the biggest challenges facing developers, however, it is important to note that competition is also very healthy. It continuously forces the market to come up with creative and innovative ideas, and this is what makes the UAE stand out from the rest of the world. 

For us, it is vital that we differentiate ourselves from our peers.

At present, there are challenges in real estate development around potential oversupply. Therefore, we must always have a unique selling proposition. I have enormous confidence and faith in our projects as every single one is bringing something different to the market, from urban community apartments to beachfront residences. 

That being said, the market has matured, and I believe that developers need to be more creative in order to sell their projects at a premium, offering favourable payment plans and developing residences that truly appeal, not only to investors but also to end users.

Most recently we launched SE7EN CITY JLT marking a new direction for us in the extended stay space, with an emphasis on lifestyle and experience. Positioned to appeal to young executives who appreciate playful style, on-trend interiors and functional spaces, in an urban setting.

- Abdulla Bin Sulayem, CEO, Seven Tides International

WHAT PROPERTY PORTALS SAY

Paul Spargo, Propertyfinder

The property market has bottomed out and prices are beginning to stabilize.

- Paul Spargo, Propertyfinder

"Opportunity, lifestyle and of course the climate (most of the year!) are some of the key reasons attracting talent to this region, fuelling population growth. Yes, property transactions have declined in volume in 2018 and inflation has run high for an extended period, however, the property market has bottomed out and prices are beginning to stabilize. 2018 has seen the emergence of affordable housing and financial support from developers through highly attractive post-payment plans, both extremely important initiatives for the region. 

We have seen some consolidation within the real estate industry this year and are likely to see more throughout 2019 as the market matures and businesses prepare for the upturn. Winning the bid to host the World’s Expo in 2020 was great, however, the market has been anything but stable since winning the bid. 

The highs and lows are inevitable and healthy for markets as they drive innovation and provoke change. Construction and infrastructure spending is necessary in order to host the Expo, however, other initiatives will have to follow to support the amount of new supply entering the market - that’s really exciting. 2019 is certainly a buyers market where transparency and data will drive most purchasing decisions." - Paul Spargo, Commercial Director, Propertyfinder

Samer Abdin, dubizzle Property

The 'buyers-market' trend of 2018 is likely to continue into next year.

- Samer Abdin, dubizzle Property

"In 2018, the softening property prices, an array of choices and accessible home loan offers made the cost of ownership more attractive versus the cost of rent for UAE residents. With the recent policy decisions, such as granting long-term visas to UAE property owners, the prospect of investing is now even more attractive, and the ‘buyers-market’ trend of 2018 is likely to continue into next year. 

We will also start to see the primary market begin to stabilize as the supply soaks up the demand in the lead up to the Expo 2020, with affordable units making a big part of off-plan developments. We anticipate that there will be increased interest from international investors, particularly Chinese nationals, due to the efforts from the UAE government to strengthen ties. Macroeconomic factors including the current position of the real estate and stock markets in China and the depreciation of the Chinese Yuan will also play a role in driving this interest."

- Samer Abdin, General Manager, dubizzle Property

what real estate crowdfunders say

Abdul Kadir Faizal, Smart Crowd

Expectations of 3-4% per year, will eventually solve the supply and demand dynamics

"The property market has experienced a downturn since 2014 and the expected supply coming into the market is having an impact on investor confidence to invest in the market. Despite the high number of planned projects, the influx of new demand that is expected to be created from the expo and population growth, expectations of 3-4% per year, will eventually solve the supply and demand dynamics. The Dubai real estate market remains strong and we expect prices to gradually increase and rental yields to improve by the end of 2019 as oil prices rebound and new demand is created."

- Abdul Kadir Faizal, Co-founder, Smart Crowd