November sees healthy demand for ready homes in Dubai
The year 2018 has been marked by the shift in fortunes for Dubai’s ready property market. With developers now replicating the incentives hitherto offered in the off-plan space in the ready property market, there has been a resurgence in demand for completed or close-to-completion properties.
This is evident from statistics. In value terms, Dh20.6 billion worth of ready homes have been sold from January until November end this year, which is a marginal 3 per cent decline from 2017, according to data from GCP-Reidin. Even the off-plan market has seen Dh20.636 worth of sales year to date, however, this is a steep 34 per cent decline from the corresponding period last year.
“A look into transactional activity of off-plan and ready units reveals that the market was fairly balanced in 2015; this changed dramatically by 2017 when the ratio of off-plan to ready transactions doubled to 2:1. In 2018, we have begun to see a reversal of this trend as the ready market has largely began to replicate the incentives that were being offered in the off-plan space. This has occurred against the backdrop of overall transactions having fallen in 2018 as the real estate market has remained sluggish,” says Sameer Lakhani, managing director, Global Capital Partners (GCP).
Even in terms of volume, the number of off-plan units sold year to date is 16,031, a decline of 27 per cent from the 21,913 homes sold in the first 11 months of 2017. November witnessed 1,394 off-plan transactions; May was the only time this year when off-plan transactions crossed 2,000 units.
“Off-plan transactions have had a difficult time keeping up with the torrid pace of 2017, but it looks like there has been a ‘base effect’ being witnessed, indicating a stabilisation of the demand curve at these levels. The data seems to be indicating a basis for optimism going into 2019,” says Uzair Razi, chief investment officer, GCP.
But there seems to be hardly any lag when it comes to ready properties. Ready home sales in Dubai crossed 10,840 units in the first 11 months of 2018, only down 2 per cent (or 213 units) compared to the 11,053 units transacted in the corresponding period in 2017, says GCP-Reidin data.
The next few weeks could see the number of ready properties sold this year overtaking 2017’s by a healthy margin. This buoyant demand for ready properties could incentivise Dubai developers to stick to their delivery timelines for projects with imminent completion dates.
The most popular location for ready home buyers is Dubai Marina, with 1,461 units sold in the first 11 months. That’s only 15 per cent down from last year. This is followed by International City, where 939 homes were sold in the first 11 months, a dip of 17 per cent from last year.
Other apartment communities on the radar of ready home buyers include Sports City, Akoya – Damac Hills, MBR City, Dubai Silicon Oasis (DSO), Meydan City, Al Furjan, Culture Village and Barsha Heights. There is always a heightened increase in transactional volume once buildings start getting handed over. Therefore, new communities such as MBR City and Akoya – Damac Hills will see a spike in transactions going forward. Whereas in Al Furjan and Sports City, developers are getting creative with payment plans and rent-to-own schemes for ready homes.