Thursday, July 13, 2017

UAE real estate market sees mixed trends in H1

The UAE estate market witnessed mixed trends in the first half with both the sale and rental prices at Dubai and Abu Dhabi registering a minor decline; however it remained a rich ground for investors looking for strong returns, according to a report.

Compared to the second half of 2016, the average rents have dropped by 10.4 per cent, and average property sale prices fell by 7 per cent, stated leading UAE portal Bayut in its review.

The decrease from both sides of the real estate market indicates that the average return on investment (ROI) has remained stable (4.7 per cent) while the market itself has become increasingly accessible for buyers, it added.

On the Dubai scenario, Bayut said by the end of first six months, the average rental prices in Dubai fell across all property types,.

For example, the average rent for a three-bed villa has dropped by 7.6 per cent while the average rent for a 1-bed apartment has declined by 6.1 per cent. The only stable property type in Dubai’s rental market throughout H1 were studio apartments which saw a nearly imperceptible dip of 0.1 per cent, it stated.

The average property prices in the first half of 2017 marked a seven per cent decrease compared to H2 2016. However, as both the rental and sales markets are exhibiting a downward trend, the average ROI in Dubai has remained relatively consistent at 4.7 per cent, compared to 4.9 per cent at the end of 2016.

The most popular areas to buy in Dubai have had a downward price adjustment. While average property prices in Downtown Dubai have decreased by 6.6 per cent, Dubai Silicon Oasis has seen a decline 4.9 per cent, said the report.

Haider Ali Khan, the chief executive of, said: "We at Bayut have always been data focused and our aim is to be at the forefront of assessing the market trends based on the properties being listed by the real estate brokerage community.”

"Over the past years, the market has gradually matured, and as this progression has taken place, investors need more credible information regarding the housing market, and we are working diligently in doing our part by presenting the information," he added.

As per Bayut report, the most popular communities in Dubai for rent in H1 2017 were Dubai Marina, Dubai Silicon Oasis, and Jumeirah Village Circle, while in Abu Dhabi, the hotspots for rent were Al Reem Island, Khalifa City, and Mohamed Bin Zayed City.

The most searched areas in both emirates, for buying property in H1 2017 were the traditionally in-demand areas, such as Dubai Marina, Downtown Dubai, and Al Reem Island, but also smaller family-friendly suburban areas like Arabian Ranches and Jumeirah Village Circle, it stated.

On Abu Dhabi, the UAE portal said the first half had experienced a similar trend to that of Dubai as both rent and property price averages have experienced a decline.

The data has gathered is in line with the overall market predictions and trends that anticipated a price fall in Abu Dhabi in 2017.

Compared to H2 of 2016, average rent prices in the capital fell by 6.3 per cent in the first six months across all property types. Studio apartment average rents dipped 4.3 per cent, from Dh51,184 at the end of 2016 to Dh48,483 now, said the report.

Similarly, rents for Abu Dhabi villas adjusted downward. For example, renting a four-bedroom villa became 7.7 per cent cheaper on average, it added.

More specifically, decreases were marked on average rents in Al Muroor (10.7 per cent) and  Mohammed Bin Zayed City (16.2 per cent) and other popular areas. However, Khalifa City was not part of the trend as average rents there surged by 3.4 per cent.

According to Bayut, the average property prices in Abu Dhabi have also decreased with declines limited to lower single digit percentages, however, studio apartments in Abu Dhabi have not been subject to the same fall in prices as its larger counterparts (average studio property prices have increased by 2.2 per cent).

Despite a drop in prices, the average ROI in Abu Dhabi still stays strong (5 per cent on average), it added.

On the future outlook, The Emirati portal said despite a decline in property prices, the fall in rental prices has kept the ROI consistently stable. Thus, it is currently more accessible for buyers to invest in both Dubai and Abu Dhabi than ever before.

As per the predictions of most industry experts, both the emirates are likely to witness a rise in property prices and rents over the ensuing years due to the continued investment in infrastructure, diversification of the economy, and the Expo 2020 being around the corner, it added.-TradeArabia News Service

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