If you're keen on buying Dubai real estate, the best deals can be found in new build, ready-to-move-in property. This is effectively newly built supply, which has been completed and still sits on the developers' stock sheet. This property segment tends to come with flexible payment terms and the ability to negotiate on prices.
"This segment holds the main draw for today's buyers, over and above off-plan and secondary stock. Buyers might have to wait years to take delivery of their off-plan investment while certain properties in the secondary markets are showing their age and need significant refreshment," said Richard Paul, head of professional services and consultancy Middle East, Savills.
While there are lucrative deals to be had in the off-plan market, the recent slowdown in off-plan sales shows a higher percentage of buyers opting for ready units or units reaching completion as they prefer immediate occupation. The majority of off-plan properties being sold is sub Dh1.5 million, therefore predominantly apartments, informed Paul.
With over 21,700 homes delivered in 2018, the highest number of deliveries since 2011, sales prices are expected to remain under pressure in the foreseeable future.
"Sales prices will continue to drop in 2019, however the rate of decline is expected to slow towards the end of this year. It is important to note though that as rents are likely to fall more than sales prices, this needs to be factored into the investment calculations," reckoned John Stevens, managing director, Asteco Property Management.
The steady decline in sales prices for completed projects has increased affordability and opened the market to a wider investor pool and facilitated a rise in end-users and first-time buyers. The Dubai Land Department announced that there were 9,500 first-time buyers between January and August 2018.
"However, there are still challenges when it comes to loan-to-value ratios currently in place, which requires a 25 per cent down payment for expatriates, plus other fees. 2019 will follow a similar trend as in 2018 in light of regional and global economic headwinds, as well as the current and expected oversupply in the market. Developers and investors are likely to continue to adopt a wait-and-see approach until the economy recovers and market sentiment increases. The hype surrounding Expo 2020 and earmarked growth in investment/tourism leading up to it should allow for better real estate conditions in 2020 due to improved market sentiment," Stevens pointed out.
Transaction volumes in the ready sales market, both for cash and mortgage transactions, has seen a steady increase over the last three years. The average unit prices in the secondary sales market have also shown resilience.
"This indicates strength in the secondary market where offer and demand are finding an equilibrium and more buyers are opting for ready units instead of off-plan units as they look to either transition to ownership and save on rents or look for immediate rental yields," observed Robert Thomas, head of residential at Core.
Therefore, it is indeed a buyers' market with individual property owners and developers being very flexible. It is always difficult to pick the bottom of the market, so buying near the bottom makes sense, especially when there is plenty of choice and willing sellers. However, buying decision varies according to personal preferences, depending on whether the purchase is a move towards owning to live or as an investment and this factor also drives the intent and time to enter the market.
"Although we expect further softening in the sales market, it still makes sense for tenants with a long-term horizon of residing in Dubai to save on rental outflows and move towards ownership," suggested Thomas.
It is a good time to buy now if your investment horizon (or requirement for self-use) is medium- to long-term. There is a high risk associated with short-term investments as capital gains are unlikely given the projected supply.
"There are other factors that should be taken into consideration such as: If it is for self-use, the question to ask is: would a further drop in the sales price compensate for the money spent on rent or would the wait cost you more? If it is for investment purpose, will there be any better investment opportunities in the future? Just because we expect further reductions in sales prices does not mean the products offered going forward will be a better overall investment," Stevens explained.
Cash purchases generally offer the best discount, as opposed to deferred payment plans, which factor in the developer's cost by pricing the unit higher. The latter, however, opens the investor pool. Low down payments and flexible post-completion payment plans make off-plan properties more attractive to investors/end-users with limited up-front capital.
"Whether off-plan or established projects, it is important to do your due diligence - choose reputable developers with a good track record in terms of delivery [for off-plan], quality specifications, maintenance, etc.," warned Stevens.
Meanwhile, sellers should wait two to three years until much of the upcoming supply has been absorbed and the market favours sellers rather than buyers.
"Property owners who bought during the 2009-2012 period would see capital appreciation, while acquisitions over the 2012-2014 peak values would be facing a reduction of equity," said Thomas from Core.
"The best time for an investor to sell their property in any market is when prices are rising, most preferably at or near the peak of the property cycle, but that is a gamble as no one can predict for certain when property prices peak. There are a number of exceptions to this rule such as: the investor needs to free up capital for a better investment; the unit was bought at a much lower rate, so selling it will still generate a profit," concluded Stevens.
Up to 36 per cent of UAE residents are paying more for rent than they were a year ago, according to a new survey conducted by comparison site yallacompare in Q4.
That figure is down from 47 per cent in Q3, found the yallacompare Consumer Confidence Tracker for Q4 2018, which surveyed more than 1,200 UAE residents.
Meanwhile the proportion of UAE residents paying less rent than a year ago increased 35 per cent between the third and fourth quarters of 2018.
Up to 26 per cent of those surveyed in Q4 said they’re paying less than a year ago, compared with 19 per cent in Q3.
According to Asteco, average apartment rents in Dubai were down 11 per cent year-on-year in Q3 2018, while villa rents were down 9 per cent year on year. In Abu Dhabi, apartment rents were down 11 per cent year on year and villa rates down 8 per cent.
However, the survey found that only 6 per cent of respondents are paying between 5 and 10 per cent less than the year before.
While 21 per cent are paying 5-10 per cent more than a year ago, 13 per cent said they’re paying 10-20 per cent more and 10 per cent claimed they’re paying over 20 per cent more than last year.
“We have been trying to get the message out that in the current climate, tenants can negotiate with their landlords, but they must do it three months before the lease expires,” said Jonathan Rawling, CFO, yallacompare.
“The proportion benefiting from lower rents is still lower than we would like and we hope to see a further jump in those paying less than a year ago next quarter.”
The survey also found that despite the decline in rental rates, residents have not changed homes to take advantage of lower rents, or moved to a better place for the same money.
Up to 61 per cent of the respondents said that they are still in the same home they were in a year ago. While 26 per cent are in a smaller home, 13 per cent have moved to a bigger one.
Looking ahead, 69 per cent said they are not planning to move in the next year, while 21 per cent said they’ll move to a smaller home and 10 per cent to a bigger one.
“It could be the stress of moving home, or perhaps decreases in rent aren’t yet enough to make it worthwhile, but UAE residents appear to be staying put where they are,” said Rawling.
“The data also tells us that we aren’t even seeing much upscaling, where residents move to get a bigger or better place for the same money. If you are staying put, negotiate,” he added.
A common question asked by investors, financiers, developers, analysts and the curious is when will the Dubai real estate market recover? Apartments in Dubai have seen the biggest softening in rental rates last year, according to Asteco, with an average 11 per cent year-on-year change since Q3 2017.
“The areas recording the largest drops during this period include Jumeirah Village, which saw a 15 per cent change; Discovery Gardens, JBR and Palm Jumeirah, which had a 14 per cent change; and Jumeirha Lakes Towers [JLT] and Dubai International Financial Centre [DIFC], which witnessed a 13 per cent change,” said John Stevens, managing director of Asteco.
Ali Siddiqui, research analyst at Reidin, said areas with high handovers (within the area and in the surrounding areas) recorded the highest decline in rent prices, with affluent residential neighbourhoods such as Dubai Marina declining by 8 per cent, Business Bay by 7 per cent, Downtown Dubai and DIFC by 9 per cent, and JLT by 10 per cent on yearly basis. “Dubai real estate market continued to decline in 2018 owing to the addition of new residential units coupled with low economic growth, reduced demand, and a resultant drop in consumer spending,” he said.
Since around 85 per cent of the residential supply that came in 2018 were apartments, Siddiqui said this segment recorded a larger price fall of 11 per cent, in comparison to the villa segment, which has fallen by 8 per cent on a yearly basis.
According to the Property Monitor Index, rental rates across Dubai fell on average by 7.7 per cent in the year to November with apartment rents falling by 8.4 per cent and villa and town house rents by 8.3 per cent over the same time period. Gross yields in Dubai were 6.27 per cent in November, down from 6.45 per cent a year earlier as a result of rents declining at a faster pace than sales prices over this period.
Whereas another market study conducted by Colliers International has put this decline in the range of 5 per cent to 30 per cent on a year-on-year basis. According to the global property consultant, the rental fall was recorded across the board, with Arabian Ranches seeing up to 30 per cent decline; The Springs and The Meadows up to 25 per cent; Palm Jumeirah Apartments, JLT and Dubai Marina up to 22 per cent; Downtown Burj Khalifa and Business Bay up to 20 percent; and Jumeirah Golf Estates, The Greens and The Views up to 18 per cent.
“Generally large five- to six-bedroom villas experienced the biggest declines. Smaller villas and town houses held better due to the increased affordability, making them more attractive to potential tenants, in particular upscaling from apartment living,” said Imran Hussain, head of residential at Colliers International, Middle East and North Africa.
While rent declines were witnessed across the board last year, Robert Thomas, head of residential at Core, said the highest was witnessed in Discovery Gardens (15 per cent), Dubai Sports City (14 per cent), Jumeirah Village Circle and Triangle (12 per cent) and JLT (11 per cent).
“Similar to the trend seen over the last two to three years, villas and larger apartment units have seen comparatively higher softening while studios and one-bed [units] have remained relatively resilient,” he said.
Hussain pointed out that there is no doubt that some people will take advantage of the current affordability of rentals and try to upgrade or move to larger and better properties. “However, there are also tenants who are moving not necessarily to larger or better properties; they are moving to the same type of unit just for the purpose of a better deal,” he added.
The industry experts say the current trend of rental decline is expected to continue in the coming quarters, unless the announcement of government spending and new regulations create an increase in demand during this year.
But Stevens said it is likely that due to an incoming wave of new supply in the market, rents will continue to soften throughout the year.
Thomas pointed out that the older central built stock continues to be under pressure to retain its novelty with occupier preference shifting to outer areas where newer and competitively priced options increasingly becoming available.
“For this reason, we expect rental prices to remain under pressure in 2019 and the rental market to continue being tenant friendly,” he said.
Top 5 locations
While various market studies have put varied rate of decline based on the methodologies adopted by them, we have relied on the Reidin data to come up with this map, which compares rental movements in Dubai’s top five locations (Dubai Marina, Business Bay, Downtown Dubai, DIFC and JLT) from Q4 2017 to Q4 2018.
Increased market supply and bearish market conditions led rental and sales prices to continue a downward trend in Abu Dhabi, according to a new a Q4 market report from property services company Asteco.
According to Asteco, there were approximately 6,200 residential units delivered in the UAE’s capital in 2018, including 4,500 apartments and 1,700 villas. Approximately half the supply was concentrated on Abu Dhabi’s islands, including Al Reem and Yas Islands.
There were, however, a number of projects that were delayed and that are spilling over into 2019, such as the anticipated Omega Tower on Reem Island.
Regarding rents, he reports noted that average annual rents declined 10 and 9 percent, respectively, which Asteco attributes to increased supply and market conditions.
Additionally, demand for office space was generally subdued in 2018 because of limited business and employment growth. As a result, office rental rates for offices fell, on average, 4 percent, although several mid and low-quality commercial buildings recorded increases of 10 percent or more.
The report added that off-plan properties – which were being offered at attractive rates with flexible payment options – continued to generate interest and, in some cases, high demand.
Apartment sales prices, for their part, were found to have decreased 9 percent on average in 2018, with the highest declines recorded in Marina Square and Sun & Sky Towers on Al Reem Island.
In the villa market, sales prices softened 4 percent, with the highest decreases in Al Raha Gardens and Al Reef Villas.
Asteco forecasts that approximately 11,200 residential units will be completed in 2019, including 2,350 on Reem Island, 2,500 at Al Raha Beach, 1,300 on Yas Island and 1,250 on Saadiyat.
This new supply, in turn, is expected to exert further pressure on rental rates.
“Whilst some residents are expected to downsize and seek value-for-money properties, others will take advantage of the increased choice at lower rates to upgrade,” the report added, noting that demand for office space will likely remain “tepid”.Sales prices are also expected to continue to soften, although Asteco believes that the rate of decline is expected to slow towards the end of 2019.
Despite lower than anticipated handover volumes, there were steady rental rate declines across all asset classes in Dubai in 2018, according to a Q4 real estate report from property services company Asteco.
In the report, Asteco said it recorded the delivery of 15,000 residential units over the course of the year, of which 12,000 were apartments and 2,750 were villas.
Additionally, office supply volumes picked up towards the end of the year, with an additional 2.86 million square feet in total. According to Asteco, the pace of new projects eased over the course of the year as developers “adopted a more cautious approach” in response to lower demand and growing supply.
Despite the overall handover volume being below expectations, Asteco said additional supply “was still significant” and resulted in rental declines averaging 10 percent for apartments, 10 percent for villas, and 5 percent for offices, although some areas “significantly” under or outperformed.
Sales prices across all asset classes were found to have declined by an average of 13 percent.
“Emphasis continued to be unit price points, as opposed to the rate per square feet,” the report notes. “The steady decline in sales prices for completed projects has improved affordability and hence opened the market to a wider investor pool and facilitated a rise in end-users and first-time buyers.”
According to Asteco, construction activity during 2019 for committed projects is expected to continue unabated, despite a slowdown in new project launches, largely due to construction-linked and post-completion payment plans, which ensure that payments are linked to construction milestones.
The additional supply, combined with handovers previously scheduled for 2018, will see an additional 30,000 residential units and 3.6 million sq. ft of office space brought to the market.
While Asteco predicts that the additional supply will result in continued pressure on rents, the rate of decline is expected towards the end of 2019. Generally low rents are also expected to help tenants move up in terms of size, quality and location, the report added.
Sales prices are also expected to continue to fall in 2019.
“Although the focus will remain on affordable developments, transaction volumes are anticipated to rise as residents take a longer-term view on living in Dubai,” the report added.
“While market conditions mean that it is unlikely that LTV [loan to value] ratios will change, we believe that developers, banks and other financial institutions will become more creative and introduce solutions to bypass the high down payment required to avail a mortgage.”
While the pace of new project launches eased last year as developers adopted a more cautious approach in response to market conditions, the outlook for 2019 is “encouraging”, a new report from property services firm Asteco found.
According to Asteco’s UAE Real Estate Report Q4 2018, transactional volumes and values declined across all sectors and emirates, although a number of government initiatives, including residency visa changes and 100 per cent ownership of companies outside free zones, will have a positive effect on the market this year.
"While the downward trajectory in the real estate market for the short-term is unavoidable due to tepid economic/market conditions and the expected supply glut, the outlook for the medium and long-term for the UAE is encouraging, fuelled by a pro-active government response and clear focus on economic progress and sustainability,” said John Stevens, managing director of Asteco.
Consultancy Valustrat also pointed to a renewed sense of optimism in its 2019 outlook last month, although it noted that the "tenant’s market" that characterised 2018 will continue next year.
“Prime residential areas, which saw relative resilience in 2018, may continue to see some improvement,” Valustrat said.
Despite lower trading volumes last year, Asteco said there is still liquidity in the market, which is reflected in the rise in secondary market sales and the positive response to a number of off-plan developments unveiled last year.
Supply volumes of completed properties remained “substantial” Asteco said, with 6,200 residential units delivered in Abu Dhabi in 2018 and nearly 15,000 apartments and villas handed over in Dubai.
“Whilst there has evidently been a decline in new project launches/announcements - as developers take a wait-and see-approach in light of saturation concerns - committed projects are proceeding at pace,” said Mr Stevens.
Construction progress and overly ambitious handover programmes also contributed to the delay in project deliveries last year, the report found.
Apartment rental rates in the capital declined by 10 per cent over the course of 2018, while sales prices dropped by 8 per cent on average, said Asteco. The decrease for villas was less pronounced with rental and sales reductions of 8 per cent and 4 per cent, respectively. Abu Dhabi office rents saw a moderate 4 per cent decline since the fourth quarter of 2017.
In Dubai, office rental rates recorded the most significant slide at 13 per cent, followed by apartments at 10 per cent and villas at 8 per cent.
“As a result, landlords have generally been more open to negotiate discounts, and/or offer incentives such as lease-free periods and flexible payment terms [multiple cheques] to retain tenants and entice new ones,” said Mr Stevens.
Looking ahead to this year, the report found that the freezing of school fees for 2018 to 2019 in Dubai along with the wide-ranging government reforms - such as the 10-year residency visa and retiree visa options – along with increased federal and local budgets and stimulus packages “are expected to increase investment and facilitate economic growth and play positively on market sentiment”.
“With the advanced and ever-improving regulatory, financial and physical infrastructure, the UAE will continue as a leading land-sea-air multimodal transport hub connecting the Far East with the West, and thus attract human and physical capital with a long-term view on living, investing and doing business in the country,” added Mr Stevens.
However, the report said further pressure on sales and rental rates is expected well into 2019 due to the sheer volume of supply, although the rate of decline is likely to soften. For buyers and tenants, this will translate into more attractive/competitive offers from landlords and developers, Asteco said.
Asteco, the UAE’s largest property services company, has released its UAE Real Estate Report Q4 2018, outlining the highlights of 2018 and providing an outlook for the year to come.
In addition, this year-end report looks back at the changes that have occurred throughout the UAE since 2008 and provides over 10 years of real estate data for Abu Dhabi, Dubai, the Northern Emirates and Al Ain.
“As forecasted at the end of 2017, the pace of new project launches eased over 2018 as developers adopted a more cautious approach in response to lower demand and growing supply”, remarked John Stevens, Managing Director of Asteco. Construction progress and overly ambitious handover programmes also contributed to the delay.
Nonetheless, supply volumes of completed properties remained substantial with 6,200 residential units delivered in Abu Dhabi, whilst Dubai handed over nearly 15,000 apartments and villas. Generally scattered across each Emirate, a large proportion (50%) of this new inventory in Abu Dhabi was focused on the Islands. In Dubai, supply distribution was spread across established communities (such as Dubai Marina and Downtown Dubai), neighbourhoods along the E311/E611 growth corridors (International City Phase 3 and Jumeirah Village) and brand-new developments (Al Habtoor City & MBR City) alike.
Commercial supply in Abu Dhabi was limited to the 50,000 sq.m. of office space handed over as part of the ADIB HQ completion on Airport Road, whilst Dubai office space volumes picked up towards the end of the year with the early release of the final two buildings (over 70,000 sq.m.) of the One Central development located in the Trade Centre district.
Although these figures represent a notable decline on projections released at the end of 2017, the additions resulted in marked pressure on rental rates and sales prices across all asset classes.
Apartment rental rates in the Capital declined by 10% over the course of the year, whilst sales prices dropped by 8% on average. The decrease for villas was less pronounced with rental and sales reductions of 8% and 4%, respectively. Office rents saw a moderate 4% decline since Q4 2017.
The Dubai sales market noted an even drop of 13% for apartments, villas and offices alike. Office rental rates recorded the most significant decline of 13%, followed by apartments with 10% and villas at 8%.
Overall apartment rental rates in the Northern Emirates contracted by 9% year-on-year with Ajman declining the most by 13%, followed by Ras Al Khaimah (10%), Sharjah and Fujairah (8%) and Umm Al Quwain (5%).
Al Ain apartment and villa rental rates decreased by 2% and 9%, whilst office and retail rents dropped by 5% and 7%, respectively.
John Stevens comments: “As a result of these declines, landlords have generally been more open to negotiate discounts, and/or offer incentives such as lease-free periods and flexible payment terms (multiple cheques) to retain tenants and entice new ones.Asteco’s partnership with Direct Debit System FZ LLE launched a Direct Debit System allowing monthly payment options to Tenants, which is a first for the UAE real estate market.”
2019 and beyond
2018 saw the announcement of a number initiative and catalysts such as increased federal and local budgets, stimulus packages, diversification/growth strategies and reduced cost of doing business, which are expected to increase investment and facilitate economic growth, thus play positively on market sentiment.
Despite these welcome efforts further pressure on sales prices and rental rates is expected well into 2019 due to the sheer volume of supply.It is anticpated that the rate of decline is likely to soften towards the end of the year.
‘Whilst the downward trajectory in the Real Estate market for the short-term is unavoidable due to tepid economic/market conditions and the expected supply glut, the outlook for the medium- and long-term for the UAE is encouraging, fuelled by a pro-active government response and clear focus on economic progress and sustainability’, said Stevens.
For more details, please visit www.asteco.com
Recapping 2018 is not easy as the news cycles were dominated by a slew of positive initiatives and launches by the government geared to boosting market sentiment - while the market itself remained soft. The year began with the introduction of value-added tax (VAT) grabbing maximum attention and we have come to realise the property sector was not too adversely impacted by this. Then, there were announcements of significant positive changes in visa regulations and business ownership rights for expats which when implemented should have a positive effect on the economy.
In the real estate sector, oversupply in the market has led to an average 11 per cent decline in apartment rents between Q3 2017 and Q3 2018. This decline has been felt across the market. Well-maintained and managed properties have been less negatively affected - a positive for tenants as they are able to identify landlords who have reacted to the market and understand that service is important. As the year progresses, there seems to be little change in the statistics. However, the situation may be brighter than the numbers suggest. This lowering of rents has had a very positive impact on tenants and balanced the increase in cost of living.
Since Q4 2017, Dubai has witnessed a drop in rental and sales prices across the city and the downward trend has continued into Q4 2018. The areas with the most pronounced changes include Al Furjan, Arabian Ranches, Jumeirah Park, Jumeirah Village, Discovery Gardens, Business Bay and Jumeirah Beach Residence.
Over the past 9 months, a total of 9,250 apartment units were completed and another 2,650 are expected to be handed over by year-end, while 2,195 villa units were completed from Q1 to Q3 2018 with an additional 1,500 units to be delivered in the last quarter of the year.
With regards to major launches and handovers, various waterfront projects made headlines with the launch of Emaar Beachfront by Emaar Properties, Port de La Mer by Meraas and the handover of Dubai Wharf by Dubai Properties. Additionally, the city saw announcements of project handovers along the corridors of Sheikh Mohammed Bin Zayed Road and Emirates Road, and new communities closer to the Expo 2020 location.
More stable and mature market
The stability and reliability of the market has significantly improved due to higher transparency in the industry, an outcome of more stringent governance by the Real Estate Regulatory Agency and Dubai Land Department (DLD), as well as the full implementation of the escrow system. The softening of prices is a direct consequence of this market maturity, which is now increasingly favouring tenants and buyers.
In a bid to support the transformation of Dubai to a smart city, the Dubai Paperless Strategy was launched by Smart Dubai. Phase one of the initiative is set to be completed by the end of 2018, aiming to eliminate the use of paper transactions. Developers are boasting 3D virtual property tours and blockchain deployment for property contracts, as well as a huge emphasis on seeing a rise in the integration of smart technology in real estate. It is being implemented by developers, property managers and brokers.
A large proportion of the 16,750 units slated for handover by end-2018 is concentrated in the affordable segment, with prices for apartments and villas as low as Dh425 per square foot. Developers are now focusing on building properties for end-users, and are offering attractive incentives as well as competitive rates and payment plans.
Beachfront and community living
Beachfront living appears to be a trend that has caught the public imagination in 2018. More people are also moving to decentralised areas in Dubai, as they offer fully self-contained communities that comprise low-rise buildings, townhouses and villas.
Lease-to-own schemes are now increasingly becoming more popular among developers. They give investors the chance to rent a property for three years and then decide whether they want to buy it by the end of the period.
Outlook for 2019
Dubai's real estate market will continue to mature throughout 2019. It is likely that the current 'buyers market' will persist as investors continue to have a wealth of choice, and as increasing handovers further impact property prices. Another trend that will be more pronounced will be affordability. As the middle-class segment rises, more affordable housing options will enter the market. Finally, the growth in the economy in line with Expo 2020 and Dubai Vision 2021 will set the tone for a positive and upward trend throughout the upcoming year.
When is the right time to buy property? In a property market cycle, the “trough stage” is generally the phase that is most conducive for buyers looking for steep discounts. It is the stage characterised by languid investor interest and declining prices — a buyer’s market.
According to research by Asteco, third-quarter rents in some popular locations in Dubai have dipped by double digits year-on-year — 23 per cent for studios in Discovery Gardens and 18 per cent for two-bedroom villas in Arabian Ranches. “There’s no doubt that 2018 has seen the UAE real estate market enter into a mature phase, no longer characterised by the frantic buying and selling that has been its hallmark for many years,” said Elaine Jones, chairman and founder of Asteco.
During the first nine months of the year, the number of investors in Dubai real estate dropped by 30 per cent compared with the same period last year, according to ValuStrat. The value of investments also went down 40 per cent to Dh50 billion. “These statistics seem to suggest that the Dubai residential market is on the cusp of the ‘trough stage’, where buyers could get the upper hand in price negotiation,” said Haider Tuaima, head of real estate research at ValuStrat.
However, despite the signals in the market, many buyers typically wait for prices to further fall, which may not be a sound strategy. “[If they continue to wait it out], it might just be too late,” said Tuaima, explaining how the choicest properties could become quickly unavailable as the market enters the initial stages of recovery. He said homebuyers and investors must be vigilant to pick up signs of the market transitioning into the next phase.
“Our data analysis has shown that the average ticket size for recently sold homes in Dubai is on the rise, suggesting that an increasing number of investors are opting for well-located, high-end property in anticipation for medium-term capital appreciation,” said Tuaima.
Dima Isshak, manager of strategic advisory at CBRE Middle East, also noted a 9 per cent year-on-year increase in secondary market transaction volumes, “suggesting investors perceive real value in the residential market”.
Isshak pointed to Dubailand as the most popular location for future supply, accounting for up to 24 per cent new deliveries in the next couple of years, followed by Dubai Creek Harbour (14 per cent) and Mohammad Bin Rashid City (12 per cent).
While there are currently plenty of buyer-friendly deals, property experts agree that the next 12 months will be a critical phase for the real estate sector — one that they hope will usher in opportunities for both sides of the market.
“Moving into 2019, we anticipate stability in the UAE market and the region generally, which will result in an increase in demand and activity leading up to Expo 2020 Dubai,” said Jones.
Property services company Asteco manages close to 20,000 units in the UAE. Out of which 70% is in the residential sector, a little more than 20% is commercial and 7% to 8% is in the retail.
Asteco engages with several FM suppliers and the firm’s managing director John Stevens says why single service contracts make more sense from their point of view.
“The challenge we face is that we cannot use our influence to buy bulk services. We cannot have a relationship with a single FM company because in most cases a building is tendered individually. We have no full service FM contracts, all of our buildings are individually tendered and we manage each function accordingly — hard and soft services,” Stevens says.
Moreover Stevens isn’t too impressed with FM suppliers billing the ‘one-stop shop’ solution.
He explains: “FM companies are not always offering integrated services — they might be good at doing security and cleaning or MEP but not HVAC. Whereas if we tender individually there is a better possibility of getting the best in each field. And whilst on larger scale developments there is a certain value, I cannot see it being too viable from a landlord’s perspective.”