Ivana Gazivoda Vucinic, head of advisory and research, Chestertons Mena, said: "In the first quarter, we witnessed positive movement on the residential transaction side for both values and volumes. This is partly due to the increase in incentives and payment plans created by developers. The increased number of transactions was followed by increased transactional value, which stood at Dh12.28 billion for both ready and off-plan units, which is a 31 per cent increase compared to the previous quarter and an indication that price points are now more in line with buyer expectation."
During 2016, there were 16,000 units added to the market, with a further 15,000 expected to be delivered in 2017. However, Gazivoda Vucinic is confident there will not be any oversupply issues - the realisation rate is increasing, from 30 per cent a few years ago to almost 45 to 50 per cent now.
Gazivoda Vucinic said: "Early signs are showing that the residential market is on its way to recovery. With a growing population and foreign investors' appetite, we expect the forecasted units due for delivery this year to be easily absorbed by additional demand."
House rents dropped marginally in Q1. While average apartment rents dropped by one per cent across Dubai, properties in DIFC bucked the trend with a four per cent increase compared to Q4 2016. In Dubailand, rents fell by almost four per cent, with similar drops experienced in JLT and Remraam.
Villa rents also fell by one per cent, with villas in Victory Heights (eight per cent) and The Springs (six per cent) experiencing the greatest drops. The Lakes saw rents increase by almost six per cent.
Apartment sales prices have increased by three per cent on average during Q1, with properties in more affordable areas experiencing substantial price rises. Dubailand recorded an average increase of almost 20 per cent, from Dh760/sqft in Q4 2016 to Dh904.2/sqft; while Dubai Sports City climbed 15 per cent on average from Dh918/sqft to 1,053/sqft.
In contrast, apartments in The Greens and JVT saw prices drop by an average of almost five per cent.
Robin Teh, UAE country manager and director of valuations and advisory UAE, Chestertons Mena, said: "We're seeing several of the newer communities in Dubai become more established and with this an increase in interest from investors. They offer a range of amenities and good connectivity which has piqued the interest of potential home owners. They are also in a price bracket much less than centrally located developments and therefore appealing to those with more limited budgets or looking to downsize."
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