Dubai property market to grow in 2019

The total value of real estate sales transactions in Dubai was up 56 per cent year-on-year to Dh15.7billion in the third quarter of 2018, and 18 per cent month-on-month, according to the latest market update from Egyptian investment bank EFG Hermes.

Residential sales drove the increase, with all market segments luxury, affordable and budget properties inDubai recording higher transaction values on an annual basis in October. Total sales in the budget sector declined slightly on a month-by-month basis, the report added. The residential increase was driven by a 59 per cent rebound in off-plan sales on a monthly basis to total Dh2.3bn, a slight rise from the year-earlier period.

The best performing areas ofDubai in the third quarter were International City, Emirates Living and Mohammed Bin Rashid (MBR) City, while Arabian Ranches, Downtown Dubai and Jumeirah Park were the worst performing with the lowest uptick in transactions.Average selling prices across all segments climbed 3.8 per cent month-on-month to reach Dh1,315 per square foot.

However, rental values continued to fall in the third quarter, according to EFG, continuing a“persistent downwards trend” recorded across most of the UAE’s real estate market coinciding with a three-year slump in oil prices that started in 2014but turned started to rebound at the end of last year.

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While higher oil prices and an increase in construction activity in the lead-up to Expo 2020 Dubai is expected to boost real estate market growth this year, property prices could continue to decline on a year-on-year basis due to the impact of rapidly rising supply, UAE real estate portal Propertyfinder said in a report on Monday.

“Property prices are expected to continue to decline [in 2019] as we are most likely to see the materialization of residential supply double, if not triple, the amount of units from past years,” said Lynnette Abad, director of research & data at Propertyfinder.

A total of 19,881 residential units have been completed in Dubai this year as of October, the report said, with an additional 14,707 due to be completed in the next two months. A further33,982 units are under construction, about 65 per cent of which will be completed over the course of 2019.

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