Dubai Apartments And Townhouses Saw Double-Digit Price Declines

Prices for both apartments and townhouses in Dubai saw double-digit declines last year, according to 2019 the United Arab Emirates Property Market Report released Wednesday by the Dubai-based real estate company Cavendish Maxwell.

The average price of a Dubai apartment dropped 15% in the fourth quarter of 2019, compared to the same time period in 2018, the report showed.
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Of the 18 development projects tracked by Cavendish Maxwell in the report, only one, Al Furjan, a community of townhouses and villas over more than two square miles, saw price growth in 2019. Average prices were up 6.9% there compared to 2018. On the other hand, the nearby communities of Discovery Gardens and Jumeirah Village Triangle both saw price declines of more than 23%.

“While supply remains the primary driver for price declines, some locations have started to see signs of stabilization, and even recovery,” the report said. “Softening prices have also generated buyer interest, as displayed in the higher volume of sales transactions during the year.”
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In addition, a new wave of supply is set to open in early 2020. More than 50,000 units are expected to become available in the coming months, most of which are apartments, the report showed. On the other hand, developers seem to be stepping back from new projects, and fewer than half were announced in 2019 compared to 2018.
For Dubai villas and townhouses, the average price in the fourth quarter of 2019 was down 18% year-over-year, the report found.
“Price declines were more pronounced in villas/townhouses compared to apartments during the period as buyer interest gravitated towards the affordable properties segment,” the report said. “Communities such as The Meadows, Jumeirah Village Triangle and Victory Heights registered declines of over 20% each.”
However, the total number of off-plan sales of villas and townhouses were up to 1,944 in the fourth quarter, compared to 491 for the same quarter in 2018, the data found. Off-plan transfers make up over 60% of all deals. 
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Looking ahead, a number of policy changes initiated in 2019 are set to improve the real estate market across the U.A.E., according to the report. Those include interest rate cuts, fewer lending regulations and a revamped visa program for long-term residents.
“The year 2019 saw a number of landmark policy changes introduced to boost investor confidence and spur investments in sectors such as real estate,” the report said. “These changes are likely to have a significant positive impact on the economy for years to come.”