Dubai: Activity in the residential real estate market slowed in the three months to June, with both prices and volumes lower than in the previous survey according to the latest Emirates NBD Dubai Real Estate Tracker survey.
The Real Estate Tracker comprises two surveys: one for estate agents and one for consumers, with questions covering both sales and lettings.
According to the survey data, the rental market remained in strong growth territory in June. “Unlike the PMI surveys and the Emirates NBD Dubai Economy Tracker, the Emirates NBD Real Estate Tracker is not seasonally adjusted, so weaker readings as we head into the summer are to be expected, particularly as Ramadan started in mid-June this year,” said Khatija Haque, Head of MENA Research at Emirates NBD.
The survey results showed that consumers are much more upbeat about both the current state of the market, and the outlook for the future, compared with estate agents. Even as the volume and price of residential sales has declined in the second quarter, growth in lettings volumes and rent prices accelerated according to estate agents.
Prices of both apartments and villas declined in the three months to June, according to estate agents, with the composite price index declining to 35.4 from 52 in the April survey. However, the decline in average prices appears to have been on lower volumes, with the total number of sales in both segments of the market lower than three months ago. In terms of the volume of sales, 63 per cent of estate agents reported lower sales of apartments, while 58.7 per cent reported lower sales of villas compared with three months ago.
In contrast, 78.4 per cent of households surveyed said that their property had either increased in value or remained the same as three months ago, with villa owners the more upbeat than apartment owners. Indeed, only 8.9 per cent of villa owners thought that their properties had declined in value relative to three months ago, compared with 28.9 per cent of apartment owners.
Total buyer enquiries declined in the June survey, with the composite index falling to 40.3 from 54.1 in April. The decline in enquiries about villa sales was sharper than for apartments. International buyer enquiries also declined further in the three months to June. Estate agents remain less optimistic than consumers about the outlook for residential real estate prices in Dubai over the next twelve months.
The survey data suggests that the rental sector has outperformed the sales sector in the three months to June, with both agents and households reporting sharply higher rents, and higher new lettings volumes. Looking ahead, consumers expect rents to continue rising over the coming three months, although at a slightly slower pace. In contrast, nearly half of estate agents surveyed expect rents to remain unchanged over the next three months, up from 27.8 per cent in the April survey.
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