March 2020 Property Update - Landlord Advice

As expected the start of 2020 is pretty much the same as the same period of 2019 with regards to both off-plan sales and the secondary market. With the extensive supply to be expected over the next 2 years, prices will continue to adjust over the coming months but ROI's for apartments still remain higher than most city's around the globe with a healthy 6.9% for apartments and 5.52% for villas, making Dubai still attractive for Property Investors. 

So far this year the Land Department has transferred 3,566 properties on the secondary market, compared to 3,499 transactions in the same period of 2019. The off-plan market (registrations and transactions) transferred 5,022 properties compared to 4,964 in the same period Q1 2019.

Residental sale prices are at an average of AED1,066 per sq ft for apartments and AED1,005 per sq ft for villas. To give some perspective, in Q3 of 2011 apartments were at an average of AED826 per sq ft and villas an average of AED843 per sq ft. 

Rental prices across the Emirate are at an average of AED71.91 per sq ft for apartments and AED54.18 per sq ft for villas.  

Looking back to 2011 the average rental price for an apartment was AED65.52 per sq ft and villas were an average of AED56.76 per sq ft. By 2015 the prices recovered to a staggering AED104.11 per sq ft and villas to AED79.71 per sq ft. An increase of 37% in price for apartments.

In line with the above facts and the rate of supply over the next couple of years, I would expect the market to start showing appreciation in rental income and property prices within the next 3-4 years.

Landlords

Now is the time to be more open to negotiating and especially be more flexible with payment plans. We need to restructure the way we conduct leasing, start to illuminate post-dated cheques and introduce monthly payments to help tackle the supply and the current global crisis. If you would like to find out more about your current options please do not hesitate to contact me. [email protected]

data from REIDIN.com compiled by Laura Adams