Revealed: UAE Property Market Data, September 2015

The anticipation for 25,000 "imaginary" units in Dubai continued amidst the Emirate's price stablisation measures, while Abu Dhabi rentals and prices increased as supply constraints persisted in September

Property prices and rents increased in Abu Dhabi as supply remained limited.
Property prices and rents increased in Abu Dhabi as supply remained limited.

September 2015 witnessed Dubai continue its price stabilisation measures even as prices dipped in some locations around the city. 

According to property portal Bayut, Dubai Marina remained the most popular locality for buying properties in Dubai, while Bur Dubai also grew as a rental location for the Emirate's residents. 

Abu Dhabi's property market positioned itself as a mid- to long-term investment spot in September, despite the increase in rents and prices due to limited supply. Bayut data shows Al Reem Island dominated as a renting locality in the UAE's capital. 

Read Bayut's full report on the UAE property market's performance in September 2015 here: 

September’s Cityscape Global 2015 finally cleared all speculative clouds of a dampened demand induced by the purported slowdown in Dubai. The property even sent a clear message that Dubai’s realty sector was strong and its demand was increasing by the day.

The unprecedented footfall numbers at the event showed investors still see Dubai with much interest.

Developers banked on the height rental yields and affordable prices of residential properties in Dubai.

The unique combination made the new launches particularly attractive to investors and homebuyers, who were sure that the comparatively low prices of Dubai properties today would prove to be exceptionally beneficial in the future.

Real estate in Abu Dhabi trudged on with steady progress in September 2015. Property prices remained strong, while rental yields posted one of the best trends in the region.

Next page: Dubai's "imaginary" residential units. 

Dubai

While many property experts expected property prices to decline in anticipation of the 25,000 imaginary units to be delivered in 2015, the month of September passed smoothly in Dubai amidst price stabilisation.

Prices in some locations did experience a slight dip due to low transaction volumes, but rents remained strong on average and continued with their upward trends in the more popular locations of the Emirate.

The low transaction volumes were due to the government increasing property transfer fee from 2% to 4% of the property value, but this didn't dampen rental demand in Dubai.

The Emirate’s residential market offers average annual rental returns of over 7.2% of the property value, which is even higher than London’s.

Dubai Marina retained its top position for another month and exhibited an 8% increase in interest in September 2015 compared with August 2015.

Jumeirah Lakes Towers (JLT) followed with 5% more search hits in September.

Due to its affordable residential options, Dubailand overtook Downtown Dubai for the third spot, generating 27% more search hits in September and gaining two positions to become the third-most popular locality for renting apartments in Dubai.

The lively environment of Bur Dubai allowed the locality to post an 18% increase in interest in September and retain the fourth place on the popularity index.

Dubai Marina also led the popular localities for buying properties in Dubai for another month and generated a 2.9% increase in search hits in September compared with August 2015.

Downtown Dubai followed with an increase of 0.3% in total search hits, while Jumeirah Lakes Towers retained third place despite a 0.3% decrease in search hits in September compared with August.

Dubai Sports City was another locality that witnessed a minor dip in interest (0.9%) yet managed to retain its fourth spot on the popularity charts for another month.

Next page: Abu Dhabi's affordable plans

Abu Dhabi

The property market of Abu Dhabi found itself in the perfect position for mid to long-term investment in September.

Owing to a constrained supply, residential rents rose and so did the prices. The Abu Dhabi Urban Planning Council also announced that it would be launching a new policy making allotment of 20% of all new residential projects to affordable housing mandatory for all developers.

Despite the oil-price crunch, there has been no slowdown in the construction process of ongoing projects and some new launches are in the pipeline as well.

Al Reem Island continued to dominate the popularity charts for another month and exhibited a 21.39% increase in search hits in September 2015 compared with August 2015.

Al Raha Beach followed with 29.27% more search hits in September, while Al Khalidiyah retained the third spot on the popularity charts with a 32.09% increase in search hits.

Strained supply in Abu Dhabi continued to increase demand in September.

Al Reem Island maintained the top spot on the popularity charts for another month by generating an increase of 3% in search hits in September compared with August.

Al Raha Beach and Al Reef also retained their second and third positions, respectively, generating 11% and 52.8% more search hits in September.

Generating an increase of 54%, Saadiyat Island overtook Al Ghadeer for the fourth spot, knocking the latter down to fifth place on the popularity charts with a decrease of 28.4% in search hits in September compared with August.

Next page: Bayut's view of September in UAE property

Our take

The property developers of Dubai and Abu Dhabi are now focussing on building mid-end affordable residential units.

We believe the particular trend of developers addressing the imminent demand would not only strengthen the property market of both the Emirates, but it would also lay to rest all fears that developers were only bent upon launching high-end luxurious projects.

Studies indicate numerous new affordable housing projects entering the market in the coming two years. We believe these properties would likely see a burst of new investment flowing into the UAE. Office and commercial spaces remained in high demand, depicting a healthy inflow of business to the county, in September.

Bayut's CEO, Haider Ali Khan, said.“Although the activity in real estate sectors of both Abu Dhabi and Dubai has been slowed down by global factors, there is no shortage of positivity in the market. High-quality options that offer lucrative gains still remain in high demand." 

The growing business and employment activity in Dubai and Abu Dhabi means resident population is on the rise and creating a persistent demand for housing and commercial spaces. 
 

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