Now may be a good time to invest if you want to buy a property in Dubai and let it out.
According to Chestertons’ Q3 2018 Observer, average apartment and villa prices were down 6% from the previous quarter. Average rents declined at a lower rate, down 4% in Q3 compared with Q2.
The decline in values is a consequence of additional supply coming to the market, giving buyers and tenants more choice. Around 10,000 units are expected to be delivered before the end of the year and 70,000 units before Expo 2020. This pipeline of new supply should help to keep sales and rental rates under control.
The headline figures do, of course, disguise disparities between areas.
In terms of sales values, apartments in areas such as Dubai Silicon Oasis and Dubailand remained resilient, with only a 2% decline in price since the previous quarter. The highest declines have been seen in Dubai Marina at 10% and Discovery Gardens at 13%.
Villas in The Lakes and Palm Jumeirah witnessed the lowest price declines of all areas at 4% and 5% respectively. The biggest declines of 8% were witnessed in Arabian Ranches and Jumeirah Park.
If you are looking to buy, developers are trying to make it attractive, Chestertons notes, “with buyers enticed by attractive incentives including 5-year post-handover payment plans, rebates of registration fees and guaranteed rental returns amongst others”.
The biggest declines in apartment rental rates were seen in Discovery Gardens and DIFC at 7% and 6% respectively. If you own in established communities like Dubai Motor City, The Greens and Dubai Silicon Oasis, you’ll have seen smaller declines in rental values of 2-3%.
In the villa market, the biggest rental declines were seen in Al Furjan at 6% with Palm Jumeriah and Jumeirah Islands at 5%.