Dubai's secondary residential market sees renewed interest in Q2 2018
Words by Aneesha Rai in The Market · Jul 22nd, 2018
An overall analysis of the Dubai residential market in Q2 2018 revealed that secondary residential market transactions remained relatively stable. Over 1,400 villas and 6,652 apartments were transacted within the second quarter of the year in the overall residential market. Volume of transactions in the secondary market during Q2 2018 was AED 12.1 billion, compared to AED 14.4 billion in Q1 2018, according to analysis by Luxhabitat based on data by Property Monitor. In contrast, the prime residential market moved up this quarter by 1%.
Off Plan Market
In comparison, the off-plan market activity for residential transactions has continued to stabilise, with a few new launches during this period. Off-plan transaction volumes and no. of transactions dropped almost 28% from the previous quarter to AED 5.8 billion. The total number of units scheduled to be completed in 2018 is 80,000, according to Property Monitor; with over 2,000 units being delivered in each of the following areas: Downtown Dubai, Business Bay, Mohammed bin Rashid city and Jumeirah Village Circle.
Prime Residential Market
According to Luxhabitat’s analysis, the prime residential market in Q2 2018 totalled AED 3.5 billion. Secondary villa sales volumes were double off-plan sales this quarter, continuing on the trend from the last two quarters. Luxhabitat defines the prime residential market as a residential market composed of properties that lie on the high end spectrum of the Dubai residential market. Luxhabitat recognises 13 key areas that form part of this classification; the areas are Al Barari, Arabian Ranches, Downtown Dubai, Dubai Marina, Emirates Hills, Jumeirah, Jumeirah Beach Residence, Mohammed bin Rashid city, Jumeirah Golf Estates, Jumeirah Islands, Jumeirah Lakes Towers, Palm Jumeirah, The Lakes, Meadows, & Victory Heights.
The three top performing areas in the overall market as per sales volume were Business Bay (AED 2.3 billion), Mohammed bin Rashid city (AED 1.9 billion) and Dubai Marina (AED 1.2 billion).
“Overall the second quarter has seen a notable number of new residents to Dubai commencing their property search over the hot and hectic Ramadan/summer season. Existing tenants are more commonly staying cool renegotiating with their current landlords for reduced rental prices and more favourable payment terms.
While rental prices continue to significantly decrease throughout Dubai, a considerable demand for high-end, luxury rental properties has spiked. This in turn has sparked a trend among landlords who are reinvesting and upgrading their properties to compete with the many new and modern developments recently handed over. So far this year has reinforced that Dubai remains one of the most active and versatile rental markets in the world. Going forward this year, we anticipate stabilizing rental prices as we continue to adjust to the conditions of a maturing market (which should come as positive news for everyone).” Says Ryan Kasper, Luxury Rentals Director at Luxhabitat.