Business Bay, Downtown Dubai lead 20% growth in real estate transactions in 2019
Dubai registered a total of 41,988 real estate transactions last year, according to Dubai-based real estate insights and data platform Data Finder. This represents a growth of 20 per cent in the volume of registered property sales transactions compared to 34,961 transactions in 2018.
The top five areas that witnessed the highest overall property sales transactions were Business Bay (3,146), Downtown Burj Khalifa (2,816), Dubai Creek Harbour (2,492), Dubai Hills Estate (2,373) and Dubai South (2,048). For off-plan sales, the top five performing areas in Dubai were Dubai Creek Harbour (2,423 transactions), Downtown (2,088), Dubai Hills Estate (1,949), Dubai South (1,942) and Business Bay (1,811). On the secondary market, areas that witnessed the most sales were International City (1,342), Business Bay (1,335), Dubai Marina (1,280), Jumeirah Village Circle (1,108) and Jumeirah Lakes Towers (851).
“Going into 2020 and leading up to the Expo, we are expecting transaction levels to increase and prices to stabilise in certain areas. We have already started to see certain market dynamics shift as a direct effect from Expo and these trends will most likely continue throughout the year,” says Lynnette Abad, director of data and research at Property Finder.
Off-plan vs secondary transactions
According to Data Finder, there continues to be a preference for off-plan properties, with this asset class accounting for an overall 23,643 transactions last year. This could be because of attractive prices and incentives offered by developers such as waiving of service fees, a wide range of post-handover payment plans, discount on registration charges and commissions and guaranteed rental returns. However, new off-plan launches were considerably down from their 2017 and 2018 levels.
With several potential buyers still unable to afford the down payment stipulated by the UAE Central Bank to qualify for a mortgage, purchasers are increasingly opting for developer-sponsored payment plans to fund their off-plan properties. This has resulted in several first-time homebuyers getting on the property ladder.
Dubai registered 18,345 transactions in the secondary market last year. With new homes becoming completed thick and fast, developers are forced to come up with rent-to-own schemes and other initiatives to make sure that they are not left with unsold ready units. This makes it a perfect buyer’s market, with attractive prices, good deals and plenty of options to choose from. However, in such schemes, the price of a property is typically higher than a comparable property currently on the market, says Abad.
As per Data Finder project and supply data, there were over 45,000 units completed last year, which was the highest amount of units completed in one year over the last five years.
According to Nazish Khan, chief operating officer at Fidu Properties, “From an investor’s viewpoint, developers are offering heavy incentives to attract property buyers with increased preferences to buy instead of renting these days, with convenient long-term payment plans of five to 10 to even 15 years for a ready property. Developers are recognising this trend and the need to entice tenants into investing in the properties and in turn offering them payment plans that are convenient and hassle-free. For investors, it makes perfect sense to invest in an area that offers the highest return on investment and long-term appreciation.”
Popular areas for renting
Dubai Marina was the most popular area for renting last year with an average rental price of Dh98,405, says Lewis Allsopp, CEO of Allsopp & Allsopp. “This is the second consecutive year that it has come out on top,” says Allsopp. “Dubai Marina is a vibrant community and is very popular with tenants who are new to Dubai. The community caters to everyone with studio apartments for singles, an array of properties for couples and large apartments and a few town houses for families. Coming a very close second for rental popularity is Downtown Dubai where the average rental price for 2019 was Dh109,000.
“Dubai Marina, Downtown Dubai and the Palm Jumeirah will continue to be Dubai’s most sought-after communities among tenants. When expats move to the city, these pillar communities are already familiar with them and reflect a vibrant and cosmopolitan life.”