More affordable homes coming to Dubai
The property market in Dubai will see a higher proportion of residential projects being launched at lower price points, stimulating the drive to affordability, a trend that will help prevent a bigger correction in the future, a market report by a global real estate advisor said.
In the third quarter, as residential rents in Dubai remained stable, sales continued to decline by six per cent year on year, according to a CBRE report.
Dubai’s residential market is highly fragmented, with some affordable locations achieving growth, while other areas experienced more pronounced drops. “There was further compression within the sales segment, with sales rates declining around two per cent from second quarter 2015 and around six per cent year-on-year,” it said.
“While global economics have reduced investor sentiment and partially impacted Dubai’s residential sales, the slowdown is largely attributed to a price correction resulting from market stabilisation. In light of lower activity, developers are incentivising sales by offering more flexible payment plans, some of which are back-loaded and provide post-handover payment options,” said Mat Green, head of research and consultancy for the UAE at CBRE Middle East.
Green said the residential sector is likely to continue to stabilise in the coming months.
“Nearly 20,000 new units could enter the market during the course of the year, much of which will be located in the secondary submarkets of Dubailand. The market will see a higher proportion of residential projects being launched at lower price points, inducing the drive to affordability in the sales market. This is a positive trend and will help prevent a bigger correction in the future,” Green explained.
According to JLL, another global real estate consultant, only 22 per cent of 19,500 residential units launched in 2015 to date in Dubai fall in the affordable to middle-income housing criteria.