Dubai real estate: Reversal of fortune
Source: REIDIN , Author: Posted by BI-ME staff
Posted: Tue April 24, 2018 11:51 am

UAE. Over the last couple of quarters there has been a dichotomy in the rise and fall of sale volumes across the Dubai real estate market. Since 2017 Q3 till date ready transactions have risen by 24%, while off-plan transactions have fallen by 32% in the same time period. In 2017 off-plan dominated the market landscape accounting for 60-70% of all sales.

However, in the first quarter of 2018, we have witnessed a reversal where ready sales account for nearly half of the overall activity. This trend is expected to continue and was widely expected as off plan incentives reached their theoretical maximum and the price gap between ready and off plan prices reached unsustainably high levels and have begun the process of mean reversion.

A quarter-wise dissection of transactional activities reveals that off-plan sales have substantially tapered, while ready sales have increased in the last few quarters. Since 2017 Q3 till date ready transactions have risen by 24%, while off-plan transactions have fallen by 32% in the same time period. We expect that on an absolute basis, ready transactional activity will start to rise, and even though off plan sales are expected to rebound as well, on a relative basis ready transactions will gain by a higher percentage.
 
As the market has become more value driven, the variable that finally has come to the fore has been one of price. Investors and end users will continue to pursue deals where there is price advantage, regardless of whether it is in the off plan or the ready space.

This implies that the luxury end of the market will continue to remain under pressure for the foreseeable future. As developer margins continue to shrink, the market will reach an equilibrium price and product point where the fundamental underlying structure of the market will shape shift from present levels.
 
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About REIDIN
Since 2007, we have been known for being the leading provider of property data and real estate information company for emerging markets. From being the first company to offer price indices enriched with hard-to-get real estate data in Turkey and UAE, we have become a global player in Data Analytics and Data Science utilizing the most advanced AI algorithms and techniques to process large amounts of our proprietary and client data.

Today we are a multidisciplinary Data & Analytics Company helping our clients make better strategic decisions, increase revenues, lower costs, and beat competition. Among our clients are government organizations, banks, insurance companies, retailers, property developers, brokers, consultants, and appraisers.

For more information, please visit www.reidin.com

About Unitas
Unitas believes in in-depth planning and discipline as a mechanism to identify and exploit market discrepancy and capitalize on diversified revenue streams. The purpose of Unitas is to manage, direct, and create wealth for our clients.

For more information, please visit www.unitasconsultancy.com

 

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