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The tides are slowly changing. Dubai property is not only seeing a shift in preference from lower value ticket items to higher, but there is also currently more demand for larger ticket sizes.
The market is also shifting towards larger ticket sizes, indicating greater end-user activity.
"In communities driven by investor demand such as Downtown and Sports City, there was a shift from larger to smaller size units. Whereas in communities such as The Greens and Jumeirah Village Circle, the opposite has transpired. We stipulate the shift to larger size units is the effect of home ownership as end-users take advantage of price discounts.
"In the off-plan space, we have seen a preference for larger ticket sizes, which in certain communities is translating into larger spaces. End-users and investors have taken advantage of payment plans as well as prices to upsize their units," says Hussain Alladin, head of research at GCP Group.
Confirming the trend, Myles Bush, CEO, PH Real Estate Brokers, says: "We have witnessed a larger number of 'big ticket' transactions over the last three months."
While Dubai investors have always enjoyed generous-sized properties when compared to other cities around the world, in recent years, developers have been reducing unit sizes.
"Developers have been reducing property sizes to portray cheaper sales prices to attract the low-cost investor and homeowner," observes Mario Volpi, chief sales officer, Kensington Exclusive Properties.
Meanwhile, the GCP-Reidin report states that most communities have seen a rise in transactional activity in Q1 of 2017. Springs and Meadows has seen the largest increase followed by Sports City and Palm Jumeirah.
Springs and Meadows also experienced the highest price growth since its trough of approximately six per cent. On the other side of the spectrum, International City continues to test new lows, both in price and transactions.
"International City is, and always has been, associated with affordable housing and the lower end of the Dubai market. Over the past few years, many more of these kinds of developments have sprung up, giving International City more of a challenge and offering wider choices to potential buyers," adds Bush.
For instance, there has been a sharp increase in off-plan transactions in Dubai South, sparked by the launches of the Pulse and Urbana South.
"Payment plans on ready units has allowed investors to better manage cash flows, giving them access to newer areas in the same budget," GCP's Alladin points out.
According to Volpi: "International City is a micro market in itself and any activity either up or down will be due to the natural economy/sentiment of the community in and around Dragon Mart. International City attracts workers and owners of commercial interest in Dragon Mart or Dragon Mart 2. So, lower activity is down to the general slowdown in the secondary market coupled with challenging market conditions at the mall."
With Ramadan around the corner, market experts predict a slight lull in transactions. Off-plan sales may continue, disguised as 'Ramadan specials' to entice the investors and end-users.
"There will always be investors jumping onto good deals but this will only happen if sellers listen to their agents and continue to reduce asking prices from the relatively optimistic figures they are asking now. If prices do drop, we could have a good Ramadan in terms of activity but if prices remain stubbornly high, we will then see a quiet period leading up to the summer and subsequent holiday period," says Volpi.
"What we have witnessed in the last year has been a steady month-over-month increase in transactions as activity and interest continues to ratchet higher. This trend will continue and even though there will be a seasonal dip in the summer, we should continue to witness a steady year-over-year increase in transactional volumes," concludes Alladin.
- deepthi@khaleejtimes.com
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