Monday 3 October 2022

'Reversal of fortune' in Dubai real estate sector

DUBAI, April 23, 2018

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, according to Reidin, a Dubai-based real estate information company focusing on emerging markets.

Since the third quarter of 2017 till date, the ready transactions grew by 24 per cent, while off-plan transactions have fallen by 32 per cent over the same time period, it stated.

In 2017 off-plan dominated the market landscape accounting for 60-70 per cent of all sales. However, in the first quarter of 2018, Reidin said it has 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, it added.
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.

Reidin said it expects 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, said the Dubai-based firm.

The real estate information company pointed out that the investors and end users would continue to pursue deals where there is price advantage, regardless of whether it is in the off plan or the ready space, it stated.

"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," it added.-TradeArabia News Service

Tags: Dubai real estate | Reidin |

More Construction & Real Estate Stories

calendarCalendar of Events