Millennials
Millennials' voice is expected to lead to a real change in the regulation to protect the rights of home buyers and investors. Simply, millennials who buy properties will share their experience on social media, and their views definitely will reach the decision-makers who will respond to enhance the investment environment in Dubai. For example, investors are suffering from unjustified service charges, unacceptable delay in handover, loopholes in SPAs, and others.
Tech
Tech will sooner or later replace agents who serve as unnecessary links. Tech will be more adopted by real estate agencies to unlock new values to clients and find new ways to generate business.
Data
Due to the current market condition, there could be less data transparency. The market is still missing public data about buying nationalities, rental data, secondary market supply
Supply
In total there are around 507 projects under construction consisting of over 152,000 units planned to be handed over by the end of 2023. Based on the construction progress, 2020 might hit a year record in delivery as over 40,000 units will be handed over out of 64,000 units scheduled for 2020.
The top three developers are expected to deliver:
- Emaar 20 projects (7,647 units)
- Damac Properties 16 projects (8,624 units)
- Dubai Properties 7 projects (2,751 units)
The top areas to receive the supply are:
- Business Bay, 14 projects (5,391 units)
- Al Hebiah Third (Damac Hills and Mudon), 6 projects (3,727 units)
- Al Yufrah 2 (Al Qudra Road), 8 projects 3,456 units)
- Dubai South 9 projects ( 3,409 units)
- Dubai Marina 6 projects ( 2,906 units)
- Dubai Hills Estates 8 projects (2,597 units)
- Downtown Dubai 6 projects (2,566 units)
Prices
Real estate brokers, the massive supply, defaulted buyers, uncertainty in the global economy, and other forces will keep pushing the rental and sales prices down. So, the market will continue to be a buyer's market.
Sales transactions
A spike in the transactions volume coming mainly from ready properties is expected in 2020 where contrarian investors and end-users will continue to take advantage of the low prices. Compared to 2018, in 2019, there was an increase in the off-plan transactions by 34% and decrease in the ready property transactions by - 1.2%.
Property launches
New projects will obviously slow down drastically. In 2019, there were 20,560 launched properties compared to 32,045 in 2018 which formed a decrease of 36%.
Hotels
Hotels will be under more pressure by the holiday homes as more real estate agencies are joining the game and proposing the short-rental to their investors since the yearly rental prices are going down. As per Dubai Tourism, the yearly growth in rented housing in 2019 was 48% -- from 4,738 in 2018 to 7,005 in 2019.
Expo 2020
The Expo effect should crystallize by 2021 where we hope to start seeing signals of property prices recovery which is the main indicator of the market performance.
Off plan vs. ready
As a matter of fact, off plan sold by developers are more expensive than not only the ready but also any off plan property offered by individuals. You can easily spot that on the below chart that shows the prices per Sq.ft of ready vs. off-plan properties in Downtown Dubai. However, off-plan remains an option to consider due to the offers and relaxed payment plans.
Mortgage vs. sale
Despite the biased paid articles in the media, 2019 was one of the weakest years in terms of property mortgage sales transactions. There was a decrease of 10% compared to 2018.
In 2020, we expect mortgage providers to compete with developers who will keep providing lucrative payment plans in order to avoid the high total cost of ownership (TCO) of their unsold inventory.
Top performing areas 2019
Dubai Marina has been the highest performing area for ready apartments transactions since 2014 which is the starting year of this research. In 2020, we expect an increase in the transactions in Downtown Dubai and Dubai Hills Estate. You can find below the top 5 performing areas in 2019 by category:
Ready apartments transactions:
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Dubai Marina - 3006
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Jabal Ali First - 1611
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Downtown Dubai- 1193
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Al Warsan First- 1170
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Jumeirah Village Circle - 1065
Ready villas transactions:
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Al Thanayah Fourth - 459
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Al Yelayiss 2 -337
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Al Yelayiss 1 -324
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Jumeirah Village Circle - 282
-
Arabian Ranches 1 - 222
Off Plan apartments transactions:
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Dubai Creek Harbour - 2465
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Dubai Hills Estate - 1750
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Downtown Dubai - 1669
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Business Bay - 1649
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MBR City - 1615
Off-plan villas transactions:
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The Villa, Falcon City, Villanova - 1706
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Dubai South - 1188
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Arabian Ranches 2, Sustainable City, Layan, Serena - 689
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Dubai Hills Estate - 355
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Al Yelayiss 1 - 312
We hope we were able to give a better understanding of the property market. Unlike other studies in the market, our research does not depend on any 3rd party data providers. Our team sourced all figures from Dubai Land Department public data. You can visit https://property-trends.com for data visualization.