Property Review Dubai Real Estate Report Q2 2017 In the Middle East for over 30 Years 2 Property map 3 Rent Sales 4 Rent Sales 5 Offices Rent Sales
Dubai Property Map 16 3 To Abu Dhabi 6 3 46 26 19 Most Expensive Expensive Mid Priced Affordable 3 14 33 6 31 32 29 21 36 27 49 35 45 58 25 53 23 34 1 52 51 50 42 41 55 8 7 56 18 37 3 24 54 2 30 15 10 39 38 22 20 48 13 Arabian Gulf 6 9 17 28 47 3 6 12 57 40 4 5 43 To Sharjah 1 Akoya 33 Park 2 Al Barari 34 Village 3 Al Furjan Circle 4 Al Nahda 35 Village 5 Al Qusais Triangle 6 Al Warqaa 36 7 Arabian Ranches Lakes Towers 8 Barsha 37 Living Legends 9 Bur Dubai 38 Liwan 10 Business Bay 39 Meydan Culture Village 40 Mirdif 12 Deira 41 MotorCity 13 DIFC 42 Mudon 14 Discovery Gardens 43 Muhaisnah 15 Downtown Dubai Palm 16 Downtown Jebel Ali 45 Remraam 17 Dubai Creek 18 Dubai Hills 19 Dubai Investment Park 20 Dubaiand Residential Complex 21 Dubai Marina 22 Dubai Silicon Oasis 23 Dubai Sports City 46 Residential City 47 Rigga Al Buteen 48 Sheikh Zayed Road 49 Springs / Meadows 50 Studio City 51 Tecom C 52 The Greens 53 The Lakes 54 The Villa 24 Dubailand 55 Town Square 25 Emirates Hills 26 Green Community 56 Umm Suqeim 57 Uptown Mirdiff 27 IMPZ 58 Victory Heights 28 International City 29 JBR 30 31 Golf Estates 32 Islands Note: Area classification by affordability is provided for indicative purposes only as many areas in Dubai offer various types of residential units, from affordable to high end. As such, the map colour coding takes into account the most prevalent type of product and exceptions of a lower and / or higher price could be available. 6 2 DUBAI
Dubai Following a period of relative stability (Q2 2016 Q1 2017), apartment sales prices recorded a modest quarterly decline of 3%. This fall was attributed, in part, to a rising number of affordable project launches and completions. With many of Dubai s largest Developers now targeting middle-income Investors, there has been a marked shift to smaller units offering lower price points, together with a greater choice of post-completion payment options. Varied and flexible payment plans have come as a direct response from developers seeking to attract End-users struggling with the high loan-to-value ratio stipulated by the UAE Central Bank. Whilst rental rates have also recorded a marginal quarterly drop, the average annual decline has been more pronounced, falling by 7%. Downward pressure on apartment rental rates is expected to continue as projects are completed and delivered to the market. As with the sales market, there has been an increase in the number and range of incentives available. Landlords are increasingly offering incentives such as furnishings (without increment), rentals inclusive of DEWA bills, or rent-free periods of up to two months. AED per sq ft 2,000 1,500 1,000 500 0 DIFC 3% - - -3% - -3% -1 Downtown Dubai Dubai Marina -7% -8% High End Beach Residence Palm Business Bay Mid End -% Greens -4% -3% Lakes Towers Affordable Discovery Gardens Dubai Sports City -7% -7% International City Village HIGH AND LUXURY END PROPERTIES MID TO HIGH END PROPERTIES AFFORDABLE PROPERTIES From 1,300 1,100 850 1,000 1,000 1,000 1,000 800 650 700 550 700 To 2,300 2,500 2,000 1,700 2,600 1,700 1,600 1,500 900 1,000 800 1,000 Average Sales Price (Q1 2017 - Q2 2017) Y-o-Y % Change (Q2 2016 - Q2 2017) -1 TYPE STUDIO 1 BEDROOM 2 BEDROOMS 3 BEDROOMS % CHANGE AED 000 S PER ANNUM FROM TO FROM TO FROM TO FROM TO Q1 2017 Q2 2016 HIGH END PROPERTIES DIFC 65 85 80 130 0 180 150 250-7% Downtown Dubai 55 85 75 120 105 160 150 250-1 Dubai Marina 45 90 65 0 85 150 0 220-3% -9% Beach Residence 70 90 80 120 0 140 135 200-4% -8% Palm 70 90 80 150 0 200 150 300-1% -8% 2016 H1 2017 expected in 2017 Sheikh Zayed Road 70 80 75 125 100 160 120 200 MID END PROPERTIES Business Bay 50 80 65 100 90 145 135 180 - -14% Greens 55 70 70 100 100 150 5 200-4% -9% Lakes Towers 50 70 60 90 75 145 0 180-3% AFFORDABLE PROPERTIES 8,750 7,500 15,000 Al Barsha 45 65 55 80 75 5 95 145-1% -7% Bur Dubai 30 60 50 80 65 120 85 170-3% -% Deira 25 55 35 75 55 100 75 150-3% -% Discovery Gardens 35 50 55 75 80 100 - - - - Dubai Sports City 35 55 50 75 70 100 90 130 - Increased product offerings have widened the Investor and Tenant pool. International City 25 40 35 55 55 70 85 105-9% Village 35 50 50 70 65 0 90 140 - -8% Asteco Property Management, 2017 3
Dubai -1% - Villa sales prices recorded a minimal change between Q1 Q2 2017, falling on average. Interestingly, although a number of established communities, such as the Meadows and Springs (with limited supply potential) followed a similar quarterly pattern, annual growth, however, was positive at 9% and 5% respectively. Whilst recent off-plan sales launches have been strengthened by competitive price points and increasingly flexible payment plans; the secondary market, unsurprisingly, remained generally correlated to demand and supply fundamentals. Villa rental rates also recorded marginal changes over the last three months. However, the average annual decline was more noteworthy at 1. Whilst families, who favour villas, have generally been more reluctant to move compared with couples and bachelors, there has been a rise in relocations, often within the community or to nearby developments. Tenants opted to take advantage of lower rental rates or upgrades, usually in the response to intransigent Landlords. Pending the considerable amount of supply expected in 2017 and 2018, we do not see any drivers that would reverse this trend. AED per sq ft 3,000 2,500 2,000 1,500 1,000 500 0 Arabian Ranches Dubai Sports City (Victory Heights) Park Village -% -4% 9% Meadows Palm From 900 900 800 550 900 1,500 850 To 1,400 1,200 1,300 950 1,400 4,500 1,150 Average Sales Price (Q1 2017 - Q2 2017) Y-o-Y % Change (Q2 2016 - Q2 2017) Springs -9% 5% TYPE 2 BEDROOMS 3 BEDROOMS 4 BEDROOMS 5 BEDROOMS % CHANGE AED 000 S PER ANNUM FROM TO FROM TO FROM TO FROM TO Q1 2017 Q2 2016 Al Barsha - - 145 200 150 250 170 300-1 Arabian Ranches 0 165 130 200 140 280 210 400-1% -13% Dubai Sports City (Victory Heights) - - 145 175 160 200 180 320-1% -9% - - 140 230 160 250 190 350-14% Park - - 175 225 180 280 240 320-1% -4% Village 105 160 0 210 120 200 135 220-3% Meadows - - 180 240 185 285 230 330-1% Mirdif 75 125 90 140 100 180 125 200 -% Palm - - 250 350 300 500 350 1,000-4% -13% Springs 100 140 0 180 - - - - -4% -16% The Lakes - - 170 250 210 300 300 400-1% Umm Suqeim - - 140 240 150 300 180 320 - -1 2016 5,000 H1 2017 1,800 expected in 2017 2,900 Additional supply resulted in an increased number of relocations and tenancy renegotiations, which consequently drove rental rates down. 4 DUBAI
Dubai Offices - - The office sector continued to display little momentum underpinned by a bearish market sentiment, low oil prices and regional uncertainties, which adversely affected potential upgrades and newcomers to the market. Rental rates remained unchanged over the quarter, although Landlords continued to be willing to negotiate terms and incentives. The average annual decline was marginal, at 3%, due to the continuing supply and demand imbalance. Nevertheless, demand remained for small, fully-fitted and serviced office space at competitive rates. The office market is unlikely to recover until economic sentiment improves in line with increased government spending, further implementation of diversification strategies and the anticipated gradual rise in oil prices. AVERAGE RENTAL RATES % CHANGE AED per sq ft 2,000 1,500 1,000 500 0-8% Barsha Heights (formerly TECOM) -16% -8% -% -4% -14% Business Bay DIFC Dubai Silicon Oasis Lakes Towers From 700 750 1,000 500 600 To 1,100 1,600 2,800 750 1,450 Average Sales Price (Q1 2017 - Q2 2017) Y-o-Y % Change (Q2 2016 - Q2 2017) AED PER SQ FT PER ANNUM FROM TO Q1 2017 - Q2 2017 Q2 2016 - Q2 2017 Barsha Heights (formerly Tecom) 80 120 Bur Dubai 80 130 Business Bay 70 130 DIFC 150 350 Dubai Investment Park 60 85 Dubai Silicon Oasis 60 140 Lakes Towers 100 250 2016 H1 2017 expected in 2017 Sheikh Zayed Road 100 250-3% 4 m sq ft 1.2 m sq ft 2.5 m sq ft Low demand and the prevailing oversupply situation continued to depress the office market. Asteco Property Management, 2017 5
Dubai Real Estate Report Q2 2017 DISCLAIMER: The information contained in this report has been obtained from and is based upon sources that Asteco Property Management believes to be reliable; however, no warranty or representation, expressed or implied, is made to the accuracy or completeness of the information contained herein, and same is submitted subject to errors, omissions, change of price, rental or other conditions, withdrawal without notice, and to any special listing conditions imposed by our principals. Asteco Property Management will not be held responsible for any third-party contributions. All opinions and estimates included in this report constitute Asteco Property Management s judgment, as of the date of this report and are subject to change without notice. Figures contained in this report are derived from a basket of locations highlighted in this report and therefore represent a snapshot of the UAE market. Averages, however, represent a wider range of areas. Particularly exclusive or unique projects have been excluded from the data to avoid distorting averages. Due care and attention has been used in the preparation of forecast information. However, actual results may vary from forecasts and any variation may be materially positive or negative. Forecasts, by their very nature, involve risk and uncertainty because they relate to future events and circumstances which are beyond Asteco Property Management s control. For a full in-depth study of the market, please contact Asteco Property Management s Research team. Asteco Property Management LLC. Commercial License No. 218551. Paid-up Capital AED 4,000,000. ORN 180