According to a new update from Cluttons, average values in the likes of Jumeirah Lake Towers (Dh1,135 per square foot), Discovery Gardens (Dh760 per square foot), International City (at Dh640 per square foot) have “stagnated” in the past 1 year to end of the first quarter of 2016.

International Media Production Zone (IMPZ) is another location where values have seen little fluctuation, at an average of Dh720 a square foot located near Dubai Investments Park.

The report adds, “Due to the resilience of values the emphasis is being placed by buyers on areas which they perceive to offer the best value for money and with homes priced between Dh650 to Dh750 per sqft and Dh1,300 – Dh1,400 per sqft being in most demand,”. “In the past this has helped to sustain values in some of the core locations in the city at these levels.”

However the report adds, at another location in the city a category of properties continues to experience sharp volatility. Business Bay mid-range apartment units are down by 12.8 percent to around Dh1,068 per square foot during the period.

But across the board, values for both off-plan and ready property are seeing less of the sharp falls at various points during 2015. Developers have been emboldened to come with new launches at balance price or slightly above the prevailing market rates, with a feeling that new launches will again show upward mobility after summer.

In terms of actual deliveries this year, the market need not to expect too much of it. Cluttons expects 7,058 units to be completed, there might be a slight improvement to 10,299 units next year and which could increase up to 16,026 units in 2018. For this to happen, new locations such as projects, properties in MBR City, Dubai South and Culture Village will have to push their effort. The other big master-developments under-construction, Meydan One and Dubai Creek Harbour, too would have built up scale by then.

Deliveries could fall back to the norm after the 2018 highs, - about 9,786 units - in 2019.
“The number of apartment and villa handovers between now and 2018 is still quite evenly split,” as per Richard Paul, who is Head of Residential Valuations at Cluttons. The overall stabilization of projected rate of handovers bodes well as it hints at the potential for strong value rises once for the market; the planned residential handovers will be absorbed by the market in two or three years’ time.

This excludes smaller projects, which might increase the number of handovers little bit before 2018, although the impact of this is likely to be quite minimal.

The coming months are going to see a keen battle between off-plan and ready property sellers and according to industry sources, the extent of incentives offered by seller will decide what sells and what stays as unsold inventory.

Investors are the one who are the most active in the buying space. Trying to get end-users in fairly large numbers and still remains a work in progress.

And for that to change, banks will require to show more support on mortgage lending.

The report adds that the number of buyers willing to carry-out 50 percent loan- to-value ratio remains limited. Not only general affordability constraints are hampering the residential market, a liquidity crunch all over the banking system is manifesting itself in tighter lending criteria.

Against the backdrop of a market, this is set where many buyers are taking a ‘wait-and-see’ approach, which has now resulted in some weakest levels of mortgages extended in the history of market, as per anecdotal evidence from our banking clients.

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