The true state of the UAE real estate in 2018 now revealed: Report
CEO of Allsopp&Allsopp, Lewis Allsopp, said in his company’s annual property market report 2018, that he gets a lot of inquiries about the UAE property market.
“I tell everyone that it’s healthy. I think when you take an overview of the 2018 Dubai Property market as a whole, you have to look past the prices which will inevitably go up and down – you must consider the economy and the population. The Dubai population has seen an increase of 6.2% in 2018 and within this population are future tenants and buyers. This shows the pulling power and attraction of Dubai is growing as expats are looking at Dubai with longevity which will stimulate the economy and real estate market further.”
The numbers paint the picture
Allsopp & Allsopp have had a 22% revenue increase from 2017.
“We have seen a decrease of 3% in buyer registrations in 2018 compared to 2017. However, the amount of off-plan launches has decreased significantly since 2017. As a result, investor buyers have decreased in 2018 by 11% compared to 2017. Overall, we had 63% of end-user buyers in 2018 compared to 57% in 2017,” said the report.
The average sale price for properties remains the same as last year at AED 2.5 million, however, the average number of bedrooms in properties sold has increased from 2 bedrooms in 2017 to 3 bedrooms in 2018. Buyers are not using the decline in pricing to cost cut but rather to upgrade their property. Likewise, tenants are also getting more bedrooms for their money in comparison to 2017. As well as more bedrooms, tenants have seen a decline in price for a yearly rent by 3.7%.
There was a 20% increase in tenant registrations in 2018. The population of Dubai continues to multiply year on year and, in turn, we see tenant registration rise. The rental cost of properties across Dubai as a whole has dropped by 30% in the last 2 years.
“As a result, we have had tenant’s registering to upgrade their homes, in line with this drop in pricing. Areas that may have been out of budget in previous years are more achievable in 2018. Therefore, rental listings have increased by 15% in 2018,” said Allsopp & Allsopp.
According to the Dubai Statistics Center, the population has increased by 6.2% since 2017 from 2,976,455 to 3,174,376. The amount of properties handed over by developers in Dubai has decreased by 5.3% since 2017 according to Property Finder statistics.
The decline in handovers in 2018 has resulted in a boost in the ready market.
“We have seen a 5.8% increase in secondary market sales in 2018. The off-plan sales have seen a decrease in 2018 by 10.7%. Dubai Marina comes out on top for areas most popular for leasing in 2018 with the Palm Jumeirah coming in a close second. The Springs is the most popular area for sales in 2018 followed by Dubai Marina,” said the report.
The most notable sale in 2018 was made on the Palm Jumeirah for AED 10.3 Million ($2.8 million) for a 4-bedroom villa in Blaqis Residence. This compares to an AED 19.2 Million 6-bedroom villa ($5.23 million) in The Lakes in 2017. The cheapest property for sale in 2018 was a 1-bedroom apartment in Damac Hills Akoya for AED 380,000 ($103.5k). This compares to a 1-bedroom apartment in Damac Hills for AED 400,000 in 2017.
Buyers and tenants are using this decline in price to their advantage and upgrading their properties. They are gaining more space, more bedrooms and often a location that was previously out of budget.
“Dubai is going to progress and become an even better place to live and work over the years to come. We continue to invest heavily in Dubai with a strong belief in the success of the city. Dubai may not be the place it was in terms of becoming a millionaire overnight like in 2006 – 2008, but, you can make a very successful career and change your life for the better as long as you are willing to work hard. Dubai is an incredible place to live and is the reason for the increase in families and individuals relocating to the city or visiting regularly on holiday. Dubai is now one of the most popular luxury destinations of the world and I think we will have a great few years ahead of us in the property market,” said Lewis Allsopp.