Dubai property market continues to moderate
Sales stagnated in the first three months of 2015, according to Asteco's latest report, with apartment sales down 3 per cent and villa sales down 2 per cent. Buyers are increasingly shifting their attention away from high-end projects to value-for-money units in completed, or almost-completed, developments.
The figures follow a year in which Dubai's market cooled, thanks to measures designed to counter the booming rebound in prices after the financial crash. In the second half of the year, monthly sales averaged 828 per month, according to Deloitte, less than half the 1,700 recorded during the same period in 2013.
According to official figures from the Dubai Land Department, the number of sales in Dubai fell almost 15 per cent in 2014 compared to the previous year. The value of deals also fell 7.6 per cent year-on-year.
While some may interpret the trend as a deflating bubble following such rapid growth, though, Deloitte argues the cool-down will ultimately boost confidence, rather than cause concern.
"While possibly not welcomed by traders and speculators, this new characteristic suggests a market that is in fact maturing and arguably strengthening," says Robin Williamson, managing director, Deloitte Corporate Finance Limited.
The sentiment is echoed by Bayut.com, whose own market report notes that cooling measures continue to weigh on prices and sales, but also bring stability to the sector, which, in turn, is "boosting investors' interest in the region".
Official data from the DLD, meanwhile, reveals that total investment stood at 64 billion AED in Q1 2015, 4.6 per cent higher than the same period in 2014. Wealthy Indians led investment with 3.04 billion AED, followed by buyers from Pakistan (1.392 billion) and British investors, who splashed 1.892 billion.
Bayut.com highlights Dubai Marina as the most sought-after hotspot for buyers, followed by Downtown Dubai and Jumeirah Lake Towers.
Even with the apparent positive increase in interest, though, the portal's overview highlights the mixed performance of property types in Q1 2015, as studio, 2 bed and 3 bed apartments saw moderate to good rises in prices quarter-on-quarter, while 4-bed and 1-bed apartments lost value and saw lukewarm demand.
Studio apartments experienced a 3.64 per cent quarter-on-quarter increase in prices on the back of strong demand, while 2 bed and 3 bed apartment prices increased 1.11 per cent and 4.02 per cent respectively across Q1 of 2015, in comparison to the same time period in 2014.
The prices of 1 bedroom apartments, though, fell 2.77 per cent year-on-year and settled on an average price of AED 1,523,300. Four-bedroom apartments saw a very significant drop in prices, with a total year-on-year decline of 12.6 per cent.
Deloitte predicts prices in Dubai will soften by 1 to 5 per cent this year before finally stabilising.