Dubai’s residential market continues to see price and rent declines in the second quarter of 2018, according to a new report.
Sales prices have fallen 1.1% for villas, townhouses, and apartments across the city, while rental declines averaged 2.5% over the same period, Cavendish Maxwell’s Q2 2018 Dubai Market Report has found.
Rent declines were more pronounced in International City, with The Greens in Emirates Living, Discovery Gardens and Al Furjan averaging 12-month changes of more than 6%.
According to the report, the majority of the rental agreements for residential properties in Q2 2018 were in one cheque (38% of total), however it reduced by 12% compared to last quarter.
Rental payments made in four cheques increased by 6% over the quarter, largely as part of the incentives landlords have been offering tenants to keep units occupied.
Off-plan sales accounted for 58% of the total sales in Q2 2018 with areas including Mohammed Bin Rashid City, Business Bay and Jumeirah Village Circle dominating this market.
On the other hand, Dubai Marina and International City led the secondary market apartment sales, along with Dubai Sports City, which accounted for 33% of the total apartment secondary sales during the second quarter of the year.
Secondary market sales among villas and townhouses surpassed the off-plan sales in Q2 2018, led by Emirates Living and International City, which together accounted for 23% of the total secondary market sales registered during the second quarter.
As for residential supply, the report notes: “For the remainder of the year, the majority of the upcoming supply is concentrated in Business Bay, Jumeirah Village Circle and Downtown Burj Khalifa. Approximately 52% of the upcoming supply expected to be handed over during Q3.
“Increasing handovers will continue to impact rents in most locations across Dubai as tenants have more choice. This will also impact occupancies in existing stock and should be factored into net yield estimations for the forthcoming period.”
The report, which also incorporates the Property Monitor Residential Survey, was conducted among partner agents operating within Dubai.