The Dubai real estate market has and continues to attract a lot of foreign investment, with Pakistanis, British, Jordanians, and Indians accounting for about a third of total investments in the first 11 months of 2018. Of the Dh 62 billion investments made within these eleven months of 2018, Emiratis topped among the GCC investors in the Dubai real estate market accounting for Dh11.5 billion, followed by Indians accounting for Dh10.8 billion, British investing in real estate about Dh4.3 billion, Pakistanis with Dh2.8 billion and Jordanians accounting for Dh1.5 billion.
However, Saudi investors, who ranked 3rd in 2017, dropped from the top five positions. About 33,888 investments by close to 26,728 investors were made in the same period. Sultan Butti Mejren, the director of Dubai Land Department, in a note published in Cavendish Report, said that investors from Egypt, Canada, China, and Saudi Arabia were also investing in real estate market in Dubai.
In 2017, Indians investors pumped over Dh15.6 billion in the Dubai real estate market, while Pakistani, British, and Saudi investors managed Dh5 billion, Dh6 billion, and Dh7 billion respectively. However, Dubai property prices, as well as rentals, have been under pressure in recent years, consistently falling stemming from surplus over the last few years. Mag Development CEO, Talal Moafaq Al Gaddah, expects an upswing in the Dubai property prices. He notes that Dubai is a dynamic real estate market that consistently attracts interest from developers who are investing in real estate to create adequate supply to satisfy the market demand stemming from several expatriates, improved regulatory environment, and big-ticket events.
Masood Al Awar, the chairman and CEO of Medallion Associates says that Dubai real estate market should get a better look come 2019 with a range of support that will insulate the market. Al Awar adds that government support for the economy will make employment and demand stable. The country’s government and infrastructural pillars for the next 2 years along with the government’s 50-year plan for diversifying the economy will bring some stability in the Dubai Property market. Al Awar adds that tourism is also set to get some boost in 2019. He also notes that though the global trend is for smart and affordable real estate, Dubai’s sector is headed in that direction.
According to DLD, GCC nationals made more than 8,096 transactions through 5,946 investors totaling to Dh16.5 billion in the first 11 months of 2018. Dubai market attracted over 3,664 Arab investors making more than 4,641 investments worth Dh7.6 billion. Over 17,118 foreign investors made 21,151 transactions valued at Dh37 billion.
It was also realized that there was also an active women participation where over 8,385 women made 9,723 investments valued at Dh16.3 billion. Transactions worth Dh194 billion were reached in this 11-month period according to DLD. Sale of land, residential units, and building reached a total of Dh69 billion, mortgages Dh101 billion, while other transactions totaled Dh24 billion.
The Cavendish Maxwell’s Report indicated that over 22,000 apartments and more than 4,400 townhouses were handed over in 2018. Going by this, actual materialization for 2019 could go in line with the previous year, where the range of annual handovers was between 16,000 and 20,000 units. A bigger portion of upcoming supply would be majorly concentrated in the Jumeirah Village Circle, Sports City, Al Furjan, Mohammed Bin Rashid City, and Business Bay.
A new report reveals that Dubai property prices have fallen by about a quarter within four years. The 25% market drop has been blamed on the tumbling oil prices and the over-supply of luxury developments.
All across UAE and particularly Dubai, the sector has nose-dived in recent years with property prices in one of Dubai’s famous places, Pal Jumeirah Island, falling by over 9% last year alone. Within the same period, capital value across Jumeirah Lake Towers consisting of 80 towers built on the edges of artificial lakes and Dubai Marina, which is a man-made area with sandy beaches and yachts, tumbled by 5-7%.
High-end real estate agents, Savills filed a UAE property report where they revealed that the townhouses sector popular with expats tumbled across the board. Apartment located in Downtown Dubai went down by over 16% while the price in Burj Khalifa, the world’s tallest building, was 12% down compared to the previous year 2017. One-bedroom apartment in Burj Khalifa was going for about $800,000 in 2010 and rose to about $1 million in 2014 when oil prices soared to reach $100 per barrel. However, according to the Middle East research brokers, today the same apartment could go for less than $550,000. A good number of its 900 units were sold out before the 2008 financial crisis so scooping higher prices before the economic slump. The report also revealed that comparing prices to 2017 December, Palm Jumeirah and Meadows went 12% down, while Jumeirah park went down by about 14%.
The development of luxury hotels as well as apartments on the man-made palm-shaped island has also stalled recently. The Arabian Ranches went down by 9% while a 2-bedroom apartment in the Business Bay, which is under construction and will have about 240 building after completion, was down by 18%. The Savills report also revealed that transaction activity went down by 22% in 2018 compared to 2017, as most buyers were on a ‘wait and watch’ situation. The report stated that there was a mismatch between supply and demand resulting in pressure on Dubai property pricing. Both rental and capital prices went down in most submarkets. The mismatch between demand and supply in the market has been as a result of the stunted market, but experts say it could bounce back in two years.
More than 31,000 homes will be completed in 2019, which is more than twice the annual demand of the city in five years. This is compared to 22,000 homes completed in 2018 according to JLL. In fact, more than 96,000 units are likely to be completed by 2020, where other major projects like the Hayat townhouses and the AlKhail Heights are also scheduled for completion.