Contenu connexe Similaire à Cavendish Maxwell_Dubai Residential Market Report_Q1 2016 Similaire à Cavendish Maxwell_Dubai Residential Market Report_Q1 2016 (20) Cavendish Maxwell_Dubai Residential Market Report_Q1 20162. 32 © Cavendish Maxwell 2016 | www.cavendishmaxwell.com © Cavendish Maxwell 2016 | www.cavendishmaxwell.com
Dubai Residential Market Report - Q1 2016
• Dubai residential market highlights
• Macro-economic factors
• Sale price performance
• Rent performance
• Residential supply
• Cavendish Maxwell Residential
Market Survey Q1 2016
Content
3. © Cavendish Maxwell 2016 | www.cavendishmaxwell.com © Cavendish Maxwell 2016 | www.cavendishmaxwell.com 54
Dubai Residential Market Report - Q1 2016
2016 Pipeline
36,000 scheduled units
Q1 2016 Completions
4,600 units
Strengths
• Hydrocarbon reserves
• Low government borrowing
• Regional ‘safe haven’
• Tourism
• Cosmopolitan cities
• Transparency (regionally)
Opportunities
• Improving legislation
• Iranian sanctions easing
• Theme parks in Dubai and museums in Abu Dhabi
• Improving transportation network
• Expo 2020
• Real estate PPP law
Weaknesses
• Oil price declines
• Water availability
• Dollar strength
• Ruble decline
• High household debt
• Transparency (globally)
Threats
• Regional political instability
• Increasing interest rates
• Introduction of VAT
• Affordability
• Global economy/Chinese slowdown
• Liquidity/credit availability
Dubai residential market highlights
UAE real estate market SWOT
Q4 2015 - Q1 2016
-3% -3%
Q1 2015 - Q1 2016
-7% -8%
“Annual inflation rate declined to 4% at the end
of 2015 after it had reached its highest level in
August 2015 of 4.41%.”
“Announced petrol and diesel prices for April
2016 have increased by an average of 11% from
the previous month.”
• The Dubai Consumer Price Index (CPI) and annual inflation rate have
gradually decreased partially due to lower petrol prices which reduced
the transport price index by 10% in December 2015.
• From January to December 2015, the highest price increase was in
food and non-alcoholic beverages by 5%, followed by an increase of
4% during the same period in the housing, water, electricity, gas and
other fuels category.
• The UAE and GCC nations are strategically preparing for a post-oil
future, with the most recent announcement of introducing a value
added tax (VAT) by up to 5% in 2018.
• Whilst, OPEC crude oil prices continued to decline reaching the
lowest price of 22.48 USD/barrel in mid January 2016, prices began
to rebound towards the end of January and continued on this upward
trend reaching an average of 34.33 USD/barrel at the end of March
2016.
• On April 17, 2016 representatives from OPEC and non-OPEC
producing nations are set to meet in Qatar to discuss the possibility
of a production freeze agreement. Whilst news of this forthcoming
meeting may have had a stabilising effect on recent crude oil prices, it
is thought this may be short lived unless an agreement is reached and
implemented to alter production.
Macro-economic factors
126
124
122
120
118
116
114
112
110
108
2.4
2.2
2
1.8
1.6
1.4
1.2
1
5%
4%
3%
2%
1%
0%
-1%
-2%
Annual inflation rate
Unleaded petrol 98 Unleaded petrol 95
Unleaded petrol 91 DieselCPI
2014
Jan
162015
Feb
16
Mar
16
Apr
162011
Oct
152010
Sep
152009
Aug
152012
Nov
152013
Dec
15
CPI
AED/litre
Annualinflationrate
Source: Dubai Statistics Centre Source: UAE Ministry of Energy
Figure 1 Figure 2
Average price movement Residential supply
Dubai CPI and annual inflation rate UAE petrol prices
(may be subject to delays)
4. © Cavendish Maxwell 2016 | www.cavendishmaxwell.com © Cavendish Maxwell 2016 | www.cavendishmaxwell.com 76
Dubai Residential Market Report - Q1 2016
• Prices continued to decline during the first quarter of 2016 as market
sentiment heavily impacted market movement as both buyers and
sellers remained in a waiting period.
• Whilst the Dubai Land Department (DLD) reported a monthly increase
of approximately 20% in January 2016 from December 2015 in the
number of unit sale transactions registered, this represents a 32%
decrease year on year from January 2015.
• Apartment prices declined between 2% and 5% in Q1 2016 from
Q4 2015 across locations and communities currently tracked by the
Property Monitor Index (PMI). During a 12 month period, apartment
prices have declined between 5% and 11%.
• In addition to the general macro-economic factors affecting the real
estate market in Dubai, new supply has kept downward pressure on
prices.
• The current price levels may represent a strong opportunity for end-
users, as some of the more established communities become more
financially accessible, leading to more diverse options for buyers.
• Investors have remained on the sideline waiting for the prices in the
secondary market to decline further or have bought select off-plan
units launched at lower than average market price.
Apartments
“Apartment prices declined between 2% and 5%, with an overall average decrease of 3% during Q1 2016.”
Figure 3
Sale price performance
• Prices in established and prime villa communities such as Arabian
Ranches, The Springs, Lakes and Meadows have continued to decline,
making them viable options for end-user buyers who may have
previously been renters within these communities.
• Whilst better quality villas in more established communities have been
more resilient to market price declines, closing the gap between the
buyer and seller price expectations remains a challenge.
• With the current price declines, gross rental yields range between
4% in Jumeirah Islands and Jumeirah Golf Estates, up to 7% in the
Springs.
• Villa size, location, age, and the availability of facilities and amenities
within the villa community remain to be the major deciding factors for
many buyers.
Villas
“Villa prices decreased between 2% and 5%, with an overall average drop of 3% during Q1 2016.”
Figure 4
Source: Property Monitor Index
Apartment price performance
Business
Bay
Emirates
Living (Views
and Greens)
Discovery
Gardens
International
City (Clusters)
Downtown
Burj Khalifa
(excluding
Burj Khalifa)
Jumeirah
Beach
Residences
Dubai
Marina
Uptown
Motor City
Dubai
Sports City
Palm
Jumeirah
(Shoreline
Apartments)
2,500
2,000
1,500
1,000
500
0
0%
-2%
-4%
-6%
-8%
-10%
-12%
Averageprice(AED/sq.ft.)
%change
Q4 2015 Q1 2016 QoQ % change Q4 2015 - Q1 2016 12 Month % change Q1 2015 - Q1 2016
-5%
-9%
-8%
-7%
-6% -6% -6%
-11%
-5%
-8%
-6%
-2%
-3%
-2% -2% -2%
-5%
-2% -2%
-3%
Source: Property Monitor Index
Villa price performance
Al Furjan
Villas
Jumeirah
Village
Triangle
Arabian
Ranches
The LakesJumeirah
Golf Estates
The MeadowsJumeirah
Islands
The SpringsJumeirah
Park
Victory
Heights
1,800
1,600
1,400
1,200
1,000
800
600
400
200
0
0%
-2%
-4%
-6%
-8%
-10%
-12%
-14%
-16%
Averageprice(AED/sq.ft.)
%change
Q4 2015 Q1 2016 QoQ % change Q4 2015 - Q1 2016 12 Month % change Q1 2015 - Q1 2016
-4%
-9% -9%
-6% -6%
-8%
-7%
-6%
-12%
-14%
-6%
-5%
-2% -2%
-3%
-2% -2%
-5%
-3%
-2%
5. © Cavendish Maxwell 2016 | www.cavendishmaxwell.com © Cavendish Maxwell 2016 | www.cavendishmaxwell.com 98
Dubai Residential Market Report - Q1 2016
100,000
90,000
80,000
70,000
60,000
50,000
40,000
30,000
20,000
10,000
-
1%
0%
-1%
-2%
-3%
-4%
-5%
QoQ % change Q4 2015 - Q1 2016Min Max
Jum
eirahBeachResidences
Jum
eirahLakesTowers
BusinessBay
DowntownBurjKhalifa*
DIFC
DubaiSportsCity
M
otorCity
InternationalCity(Clusters)
Dubailand
TheGreens
TheViews
DubaiM
arina
AEDperannum
%change
Studio rents - Q1 2016
-1% -1%
-2%
-3% -3%
-1%
-2%
-1%
0% 0% 0%
-2%
180,000
160,000
140,000
120,000
100,000
80,000
60,000
40,000
20,000
-
1%
0%
-1%
-2%
-3%
-4%
-5%
QoQ % change Q4 2015 - Q1 2016Min Max
Jum
eirahBeachResidences
Jum
eirahLakesTowers
BusinessBay
DowntownBurjKhalifa*
DIFC
DubaiSportsCity
M
otorCity
InternationalCity(Clusters)
Dubailand
TheGreens
TheViews
DubaiM
arina
AEDperannum
%change
Onebedroomapartmentrents-Q12016
-2%
-1%
-3%
-4%
-1% -1%
-2%
-3%
-1%
0%
-4%
-2%
250,000
200,000
150,000
100,000
50,000
-
1%
0%
-1%
-2%
-3%
-4%
-5%
QoQ % change Q4 2015 - Q1 2016Min Max
Jum
eirahBeachResidences
Jum
eirahLakesTowers
BusinessBay
DowntownBurjKhalifa*
DIFC
DubaiSportsCity
M
otorCity
InternationalCity(Clusters)
Dubailand
TheGreens
TheViews
DubaiM
arina
AEDperannum
%change
Twobedroomapartmentrents-Q12016
-1%
-2%
-1%
-3%
-1%
-2% -2%
-1%-1% -1%
0%
-2%
• The delivery of new developments has increased the options for
tenants as they shift from established locations to emerging areas
such as Dubai Sports City and Dubailand.
• Prices have declined at a faster rate than rents, leading to more
attractive gross rental yields in the market.
• As sale prices continue to decline, some homeowners who may have
previously been looking to sell have turned to renting their property
instead as they have not been able to achieve their expected sale
prices.
• Buyers, however, especially those residing in Dubai for the long-term
are starting to consider buying over renting.
• In most recent years as the city border continues to expand inland to
less developed areas, developers are designing and delivering villa
communities which are self sufficient providing a full scale of facilities
and amenities, including retail, food and beverage outlets as well as
schools.
• This shift in design trend, alongside the sale market conditions
and additional villa supply, has placed pressure on established villa
communities.
Apartments:
“Apartment rents have declined up to 4%
in Q1 2016.”
Rent performance
Figure 5 Figure 8
Figure 6 Figure 9Figure 7 Figure 10
Source: Property Monitor Index Source: Property Monitor IndexSource: Property Monitor Index Source: Property Monitor Index
Source: Property Monitor Index*Excluding Burj Khalifa
*Excluding Burj Khalifa*Excluding Burj Khalifa
Source: Property Monitor Index
300,000
250,000
200,000
150,000
100,000
50,000
-
3%
2%
1%
0%
-1%
-2%
-3%
-4%
-5%
-6%
QoQ % change Q4 2015 - Q1 2016Average rent
TheM
eadows
TheSprings
ArabianRanches
Al FurjanVillas
TheLakes
Jum
eirahPark
Jum
eirahGolfEstates
AEDperannum
%change
Three bedroom villa rents - Q1 2016
-1%
-3% -3% -3%
-5%
0%
2%
350,000
300,000
250,000
200,000
150,000
100,000
50,000
-
3%
2%
1%
0%
-1%
-2%
-3%
-4%
-5%
-6%
QoQ % change Q4 2015 - Q1 2016Average rent
TheM
eadows
TheLakes
TheSprings
ArabianRanches
VictoriaHeights
Jum
eirahPark
Jum
eirahIslands
Jum
eirahGolfEstates
AEDperannum
%change
Four bedroom villa rents - Q1 2016
-3%
0% 0%
-4%
-5%
0% 0%
-1%
500,000
450,000
400,000
350,000
300,000
250,000
200,000
150,000
100,000
50,000
-
3%
2%
1%
0%
-1%
-2%
-3%
-4%
-5%
-6%
QoQ % change Q4 2015 - Q1 2016Average rent
TheM
eadows
TheLakes
ArabianRanches
VictoriaHeights
Al FurjanVillas
Jum
eirahPark
Jum
eirahIslands
Jum
eirahGolfEstates
AEDperannum
%change
Five bedroom villa rents - Q1 2016
0%
-2%
-3%
-1%
-2%
-1%
-4%
2%
Villas:
“The delivery of additional villas into the
market has created a downward pressure
on rents.”
6. © Cavendish Maxwell 2016 | www.cavendishmaxwell.com © Cavendish Maxwell 2016 | www.cavendishmaxwell.com 1110
Dubai Residential Market Report - Q1 2016
• 43% of the total number of units initially scheduled for 2015 were
postponed to a completion date in 2016, whilst 4% were placed on
hold with no definitive completion date.
• 10% of the units delivered in the first quarter of 2016 were projects
delayed from 2015 and mainly located in JVC, Dubailand and Meydan.
• Approximately 44% of the completed developments in Q1 2016 have
been apartment units, 38% townhouses and the remaining 18% villas.
• The completion of Phases 1 - 4 of Reem Mira villas in Q1 2016
brought an additional 1,582 units into the community with Phase 5 of
the project expected to be completed at a later date in 2016, with an
additional 316 villas.
Q1 2016 Completions:
“Approximately 4,600 residential units have been completed in the first quarter of 2016.”
Figure 11
Residential supply
21
1
3
2
7
10
8
4
7
6
5
4
3
2
1
9
5
6
1 Al Jaddaf
2 Business Bay
3 DIFC
4 Dubai Investment Park
5 Dubai Silicon Oasis
6 Dubai Sports City
7 Dubailand
8 IMPZ
9 Jumeirah Park
10 Jumeirah Village Circle
400 - 500
501 - 600
601 - 700
701 - 800
801 - 900
901 - 1,000
1,001 - 2,000
Range
21
1
3
2
7
10
8
4
9
6
9
8
7
6
5
4
3
2
1
5
1 Al Furjan
2 Business Bay
3 Dubai Marina
4 Dubai Silicon Oasis
5 Dubai Sports City
6 Dubailand
7 International City
8 Jumeirah Village Circle
9 Mohammed Bin Rashid City
10 Reem
1,001 - 1,500
1,501 - 2,000
2,001 - 2,500
2,501 - 3,000
3,001 - 3,500
3,501 - 4,000
4,001 - 4,500
4,501 - 5,000
> - 5,001
Range
• At the end of 2015, there were approximately 38,000 units initially
scheduled for delivery in 2016. This figure, in addition to the 7,734
units delayed from 2015, had brought the total of additional units
expected for delivery to 46,000.
• As Q1 2016 came to an end, many developers delayed the delivery
of their projects from 2016 to 2017.
• Of the total number of projects initially scheduled for delivery in 2016
(excluding those delayed from 2015), 20% have been further delayed
to 2017 and 6% have been placed on hold.
• As the map below highlights, the majority of additional residential
units are set to be delivered in Dubailand followed by Dubai Silicon
Oasis and Meydan in Mohammed Bin Rashid City.
• Approximately 80% of the market wide 2016 pipeline supply are
apartments and 20% are villas and townhouses.
Pipeline Supply 2016:
“As of Q1 2016, there are 31,600 additional units scheduled to enter the market during the remaining
three quarters in 2016, subject to any delays.”
Figure 12
2015 Completions - Top 10 locations 2016 Pipeline - Top 10 locations
Source: Cavendish Maxwell research Source: Cavendish Maxwell research
7. 1312 © Cavendish Maxwell 2016 | www.cavendishmaxwell.com © Cavendish Maxwell 2016 | www.cavendishmaxwell.com
Dubai Residential Market Report - Q1 2016
8. © Cavendish Maxwell 2016 | www.cavendishmaxwell.com © Cavendish Maxwell 2016 | www.cavendishmaxwell.com 1514
Dubai Residential Market Report - Q1 2016
Q2 2016 sales outlook
Apartments
Percentage of agents who predicted apartment
prices would:
Villas
Percentage of agents who predicted villa prices
would:
Q2 2016 rents outlook
Apartments
Percentage of agents who predicted apartment
rents would:
Villas
Percentage of agents who predicted villa rents
would:
increase by more than 5% increase by up to 5% not change decrease by up to 5% decrease by more than 5%
increase by more than 5% increase by up to 5% not change decrease by up to 5% decrease by more than 5%
Figure 13
Figure 14
Source: Cavendish Maxwell Residential Market Survey
Source: Cavendish Maxwell Residential Market Survey
35%
37%
2%
0%
1%
0%
46%
43%
9% 13%8% 6%
34%
41%
46%
41%
14% 15%
6% 3%
Looking back - Q1 2016
Cavendish Maxwell Residential Market Survey
Looking forward - Q2 2016
The majority of agents surveyed had predicted apartment and villa
prices to decline further by up to 5%.
Agents had predicted that rents would remain the same
during Q1 2016.
predictions vs reality
Apartment and villa prices fell by 3% during Q1 2016.
Rents have declined across most unit types and areas.
9. Miles Phillips BSc (Hons) MRICS ACIArb
Partner
Head of Operations - UAE
M: +971 56 604 2750
E: miles.phillips@cavendishmaxwell.com
Amit Shukla
Senior Associate
Development Advisory and Real Estate Research
M: +971 56 360 3540
E: amit.shukla@cavendishmaxwell.com
Sofia Underabi BPropEc AAPI
Partner
Head of Residential Valuation
M: +971 50 435 6527
E: sofia.underabi@cavendishmaxwell.com
Dima Isshak BSc
Research Manager
M: +971 50 482 7938
E: dima.isshak@cavendishmaxwell.com
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E: jay.grant@cavendishmaxwell.com
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