dubai residential property trends 2016...jan jan jan jan jan oct 2003 2005 2008 2010 2013 2016 a...

AREPORT BY

DUBAI RESIDENTIAL PROPERTY TRENDS 2016PRICE SHIFTS, WHAT’S BEING BUILT AND WHO’S BUYING

&

CONT

ENTS Key Findings

Focus on Selected Communities

Introduction Danger of potential over supply

ImprovingTransparency Off Plan V Secondary

Market

Sales Marketin 2016 Prospects for 2017

Rental Marketin 2016

Contact Us andData Sources

1/PAGE 2 PAGE 24

PAGE 29

PAGE 35

PAGE 36

PAGE 37+38

PAGE 4

PAGE 5

PAGE 9

PAGE 22

6/

2/ 7/

3/ 8/

4/ 9/

5/ 10/

A dubizzle & JLL report2016

1.2016

2.

1/KEY FINDINGS

Rental and sale prices have remained largely unchanged over the past quarter as the Dubai residential market reaches the bottom of its current cycle.

While difficult to call the exact bottom of any market cycle until it starts to recover again, we believe the level of downside risk is limited and the Dubai residential market will move into the recovery stage during 2017.

This recovery is predicated on the expectation that economic growth in Dubai will be marginally higher in 2017 than in 2016.

Further improvements to the regulatory environment and transparency could positively impact the Dubai residential market in 2017.

Factors driving this predicted recovery include:-gradual recovery of oil prices in 2017

stronger confidence as investors recognise that the market is close to its cyclical troughcontinued government investment in hospitality, aviation, healthcare and other growth sectorsincreased employment and construction activity in the lead up to Expo 2020

A dubizzle & JLL report

20163.

CONTINUED.. Has the market bottomed out? Is it really a buyers’ market? Is this a time for buyers, be they investors or end-users, to grab the best deals before the market shifts upwards? Should tenants seek to purchase to avoid paying rent? What is the perception of the first-time homebuyer in the UAE, and who are they? Is the secondary property marketplace more favored or is off-plan property gaining in popularity?

To address some of these questions, dubizzle and JLL have come together to provide real estate stakeholders with a better understanding of the factors that have influenced the market over the past years and where the market is likely to head in 2017.

There is a general consensus that sale and rental prices have declined in Dubai during 2016, but it is equally clear that this decline has been far from uniform between segments and locations. There is far less consensus about what 2017 holds in store, with some suggesting a further decline, while others argue the market has already bottomed. Such disagreement is common when a market approaches a turning point as the precise bottom of a cycle is often only apparent with the benefitof hindsight…

INTRO-DUC-TION

20164.

2/

While moving into the upturn stage of its cycle in 2017, we do not expect the Dubai residential sector to experience a rapid increase in prices in 2017, with increases in most areas likely to remain in single digits.

The greatest threats to any recovery in 2017 would be a further slowdown in the Dubai economy or a major improvement in the materialization rate, which could lead to oversupply and a subsequent weakening of performance in some locations.

With over 30K units currently scheduled to complete in 2017, there is some concern the market could experience an oversupply that would negatively impact performance. We believe that several factors will reduce the actual delivery of units. These factors include increased construction costs and competition for resources as well as proactive measures being taken by developers who are phasing the release of units to avoid the possibility of oversupply.

With major tourism, healthcare and infrastructure projects progressing in the lead up to EXPO 2020, Dubai is creating other strong alternative income streams, alongside a better regulated real estate sector.

A dubizzle & JLL report A dubizzle & JLL report

20165.

dubizzle and JLL both feel strongly that the Dubai market would benefit from greater transparency which would allow both investors, or end-users and tenants to make more well-informed decisions. By consolidating their market data and co- authoring this report, we hope to contribute to improved transparency, which will not only help existing players, but also attract new investors to enterthe market.

In preparing this report, we have considered data from a number of credible sources including

dubizzle’s internal data warehouse for sale and rental askingprice evolution

JLL’s proprietary supply data

Third party data from Dubai Land Department (DLD), Dubai Economic Department (DED) andother sources

3/IMPROVING

20166.

IMPROVEDLEGISLATION45 years in the making, the UAE (and especially Dubai) has come a long way since its formation in creating a sustainable ecosystem to attract and retain a large expat community.

Post the 2008/9 global financial crisis, the government of Dubai, lead by His Highness Sheikh Mohammed Bin Rashid Al Maktoum, has taken several steps to shield the Emirate. These initiatives have played a key role in Dubai emerging as the most transparent market in the region as portrayed in successive editions of JLL’s Global Real Estate TransparencyIndex (GRETi.)

TRANSPARENCY


20167.

RERA is established Strata Law Decree 43 introduces the New Rental Cap Law

Rent Dispute Settlement Committee established

New Mortgage Law is introduced

Transfer fees doubled from 2% to 4% to discourage flipping of properties

dubizzle publishes first property market trends infographic report due to identified user need for increased data transparency

Escrow law introduced Joint ownership law providing for creation of Home Owner AssociationsIntroduction of real estate

register maintained by the Dubai Land Department

Many of the legislative changes were made with an aim to encourage foreign direct investment by creating attractive property laws and a more robust judicial system. Dubai’s strengthened legislation over the past decade is testament to a city with a plan to create a strong and sustainable real estate sector capable of attracting high levels of foreign investment.

Leading developers prevent resale of off-plan property until buyers pay at least 40 to 50% of the price

dubizzle study reveals improved first-time homebuyer sentiment within the millennial segment

dubizzle identifies an increase in search volumes for properties for sale in mid-market/ affordable housing areas such as JVC, Dubai Land development and Al Furjan

Publication of UAE bankruptcy law

Dubai Economic Department study shows Dubai attracts AED 17.7 billion worth of FDI in the first six monthsof 2016

Decree 41 issued to regulate the Holiday Home segment and allow short-term leasing under the Department of Tourism and Commerce Marketing (DTCM) Dubai ranks sixth globally

on value of foreign direct investment (FDI)

JLL publishes new report drawing attention to shortage of affordable housing

20168.

2007 2010 2013 2014 2015 2016


20169.

The Dubai residential market peaked in mid 2014. Over the past two years, sale prices have declined by around 15% and rentals by around 10%. This decline is, in many ways, part of a normal market cycle, with prices having increased at an unsustainable rate from2012 to 2014.

With a significant majority of Dubai expats preferring to rent rather than buy, rental prices have held up better than sales prices over the past two years. This has increased rental yields for investors and, in some cases, also resulted in a crossover as former tenants looked to purchase their own homes.

4/SALESMARKETIN 2016

DUBAI RESIDENTIAL SALE PRICE INDEX

201610.

WHO ARETHE BUYERS?After UAE nationals, Indian, Saudi, British, and Pakistani nationals topped the list of major buyers of Dubai real estate over the firsthalf of 2016.

UK investment in the Dubai real estate market fell from 9% in the first half of 2015 to 7% in the same period this year. Britain’s vote to leave the European Union in June this year is expected to further negatively impacted UK investment in Dubai. The Brexit vote caused a sharp fall (circa 20%) in the value of the GBP and negatively impacted UK investor interest in the UAE market, where prices are now comparatively higher.

One of the strengths of Dubai’s market is the diversified nature of demand, with the top 12 nationalities accounting for only 75% of all sales. This means the market is able to absorb a decline in sales from a particular nationality due to factors such as currency movements. A case in point would be Russian buyers who accounted for over 5% of all transactions in 2014 but have since fallen to less than 1%. Their place has been taken by increased activity from other key markets such as Saudi Arabia and Iran, along with more activity from Chinese andAfrican investors.

TOP 12 NATIONALITYOF BUYERS OF DUBAIREAL ESTATE 1H2016

VALUE OF TRANSACTIONS (IN AED MILLION)

300

225

150

75

0JAN JAN JAN JAN JAN OCT

2003 2005 2008 2010 2013 2016


Source:REIDIN

UAE

14,523Value:

26%

3,172Value:Pakistan

6%

1,759Value:Iran

3%

3,969Value:UK

7%

7,272Value:India

13%

4,240Value:KSA

8%

1,518Value:Jordan

3%

1,216Value:Kuwait

2%

1,030Value:Lebanon

2%

1,374Value:Egypt

2%

1,024Value:Iraq

2%

1,187Value:Qatar

2%

% SPLIT Source:DLD

201611.

FIRST-TIMEHOMEBUYERS– THE MILLENNIALSENTIMENTAccording to the Dubai Statistics Centre, there were around 1.2 million expat millenials (those between the ages of 25 and 39) in the Emirate in 2015, accounting for about 48% of the total population of Dubai.

25% said that they intended to establish their own start-up or invest in a business of interest before they invested in buying a home. This brings to light the UAE’s vision of attracting and harbouring visionary leaders by creating an environment that supports a healthy start-up scene with supporting new business legislations, such as the recently approved bankruptcy law and the possible knock on effect on the commercial property sector, business centres in specific, building up to Expo 2020.

dubizzle conducted a third party research study on millennial expats and asked where (and if ) they would buy a property in the next 3 years. Of those who believed that purchasing a home in the near future was important, 44% said they planned to buy a home in the UAE, while 59% said they wanted to buy outside the UAE. The latter preferred to buy in their home country, as they weren’t sure how long they’d stay in the UAE. There was, also a crossover of millenials who were considering buying properties abroad as well as in the UAE while they continued to live in the UAE, which they regarded as an ideal base during the prime years of their careers.

201612.

ARAB EXPATS

ASIAN EXPATS

Partly as a result of the Arab spring, many Arab expats (from outside the GCC) purchased homes in Dubai as a store of wealth or a safe haven in an otherwise volatile region. According to the Dubai Land Department’s 2016 H1 report, Arab expats invested a total of AED 7 billion in 7,577 deals (Jordanians - 765 transactions, Egyptians - 710 transactions, Lebanese - 432 transactions). As for GCC countries, Saudi Arabia investment into Dubai real estate equated to AED 4.2 billionworth in H1.

On the contrary, millennial Asian expat first-time buyers (predominantly Indians) preferred to purchase their first property back home.

The more established Indian expatriates, those who already own property(s) at home, were planning to purchase homes in the UAE due to its convenient geographic proximity to their homeland, and the ideal business environment it provides for new entrepreneurs to set up shop. The Dubai Land Department’s 2016 H1 report states that Indians, after UAE locals, were the second largest segment of property investors, contributing AED 7.27 billion worth of transactions.

dubizzle’s research study confirms that the UAE remains the preferred choice for Arab millennial expats to purchase a property. 54% of our sample (of which 41% were Arab expats) stated that their country was not a safe place, was “risky” to invest in, and/or that they did not want to go back to their home countries to live long-term.


201613.

201614.

Q3 Q3

Q3 Q3

Q3 Q3

Q4 Q4

Q4 Q4

Q4 Q4

Q1 Q1

Q1 Q1

Q1 Q1

Q2 Q2

Q2 Q2

Q2 Q2

Q3 Q3

Q3 Q3

Q3 Q3

2015 2015

2015 2015

2015 2015

2015 2015

2015 2015

2015 2015

2016 2016

2016 2016

2016 2016

2016 2016

2016 2016

2016 2016

2016 2016

2016 2016

2016 2016

962 978

928 1315

890 970

946 991

897 1212

868 1001

967 929

944 1250

875 970

938 985

925 1229

874 986

950 985

909 1217

855 986

CONTINUED..

ALL FIGURES ARE ASKING PRICES IN AED PER SQ FT







SALE PRICES TREND ANALYSIS

/MID-MARKETQ3 Q32015 2016TO

NUMBER OF SEARCHESON dubizzle






1.6M 1.9M

15M

1.7M7.1M

9.7M

PRICE DECREASE PRICE DECREASE

PRICE INCREASE PRICE INCREASE

DUBAILAND-MOTORCITY

JUMEIRAHVILLAGECIRCLE(JVC)

JUMEIRAHLAKETOWERS(JLT)

DUBAILAND-SPORTSCITY

ALFURJAN

APARTMENTS

APARTMENTS APARTMENTS


JUMEIRAHVILLAGETRIANGLE(JVT)

VILLAS

Source:dubizzle

Source:dubizzle

201615.

201616.

Q3 Q3

Q3 Q3

Q3 Q3

Q4 Q4

Q4 Q4

Q4 Q4

Q1 Q1

Q1 Q1

Q1 Q1

Q2 Q2

Q2 Q2

Q2 Q2

Q3 Q3

Q3 Q3

Q3 Q3

2015 2015

2015 2015

2015 2015

2015 2015

2015 2015

2015 2015

2016 2016

2016 2016

2016 2016

2016 2016

2016 2016

2016 2016

2016 2016

2016 2016

2016 2016

1811 1423

2497 1487

1881 1160

1534 1377

2302 1396

1867 1125

1714 1393

2407 1390

1919 1117

1698 1393

2345 1399

1833 1109

1626 1364

2326 1367

1769 1107








CONTINUED..







24M 694K

3.8M

1.5M

7.9M

8.1M

PRICE DECREASE PRICE DECREASE

PRICE INCREASE PRICE INCREASE

SALE PRICES TREND ANALYSIS

/PREMIUMQ3 Q32015 2016TO

DUBAIMARINA

DOWNTOWNDUBAI

PALMJUMEIRAH

EMIRATESLIVING-SPRINGS

APARTMENTS

APARTMENTS

APARTMENTS

JUMEIRAHISLANDS

VILLAS

VILLAS

VILLAS

EMIRATESLIVING-MEADOWS

Source:dubizzle

Source:dubizzle

201617.

SALE TRANSACTIONS OVERLAY2016

18.A dubizzle & JLL report A dubizzle & JLL report

37

72

41

23

51

25

23

26

51

18

24

80

12

16

35

Q3

Q3

Q3

Q4

Q4

Q4

Q1

Q1

Q1

Q2

Q2

Q2

Q3

Q3

Q3

2015

2015

2015

2015

2015

2015

2016

2016

2016

2016

2016

2016

2016

2016

2016

*COMPLETED SALES

*COMPLETED SALES

*COMPLETED SALES

113

5841078

228

T O T A L

T O T A L

T O T A L

JUMEIRAHVILLAGETRIANGLE

ALFURJAN/DISCOVERYGARDENS/JAF

JUMEIRAHVILLAGECIRCLE

(JVT)

(JVC)

VILLAS

APARTMENTS

Source:DLD

CONTINUED..

VILLAS

Q3

Q3

Q3

Q3

Q4

Q4

Q4

Q4

Q1

Q1

Q1

Q1

Q2

Q2

Q2

Q2

Q3

Q3

Q3

Q3

2015

2015

2015

2015

2015

2015

2015

2015

2016

2016

2016

2016

2016

2016

2016

2016

2016

2016

2016

2016

23

174

136

46

19

628

279

18

391

161

44

20

274

219

19

194

106

38

49

197

175

36

178

155

62

21

245

264

32

142

124

29

32

211

237

*COMPLETED SALES

* COMPLETED SALES REFERS TO COMPLETED PROPERTIES * COMPLETED SALES REFERS TO COMPLETED PROPERTIES

*COMPLETED SALES

*COMPLETED SALES

*COMPLETED SALES

OFF PLAN SALES

OFF PLAN SALES

OFF PLAN SALES

JUMEIRAHVILLAGETRIANGLE

JUMEIRAHVILLAGECIRCLE

(JVT)

(JVC)

128

682

1079

219

141

1174

1555

T O T A L

T O T A L

T O T A L

T O T A L

APARTMENTS

APARTMENTS

APARTMENTS

APARTMENTS

DUBAILAND-MOTORCITY


Source:DLD

/MID-MARKETQ3 Q32015 2016TO

29 5 29 602 413OFF PLAN SALES

201619.


SALE TRANSACTIONS OVERLAYCONTINUED..

101

8

127

18

75

14

109

0

90

16

Q3

Q3

Q4

Q4

Q1

Q1

Q2

Q2

Q3

Q3

2015

2015

2015

2015

2016

2016

2016

2016

2016

2016

*COMPLETED SALES

*COMPLETED SALES

56

502

T O T A L

T O T A L

JUMEIRAHISLANDS

EMIRATESLIVING-SPRINGS &MEADOWS

VILLAS

VILLAS

41 23 38 27 26Q3 Q4 Q1 Q2 Q3

2015 2015 2016 2016 2016

*COMPLETED SALES

155T O T A L

PALMJUMEIRAH

VILLAS

Source:DLD

* COMPLETED SALES REFERS TO COMPLETED PROPERTIES * COMPLETED SALES REFERS TO COMPLETED PROPERTIES

Q3 Q4 Q1 Q2 Q32015 2015 2016 2016 2016

*COMPLETED SALES

OFF PLAN SALES

179

374

185

261

154

358

170

282

107

781

DOWNTOWNDUBAI

7952056

T O T A L

Q3 Q4 Q1 Q2 Q32015 2015 2016 2016 2016

*COMPLETED SALES

OFF PLAN SALES

396

200

439

129

401

154

447

331

358

301

DUBAIMARINA

20411115

T O T A L

APARTMENTS

APARTMENTS

Q3 Q4 Q1 Q2 Q32015 2015 2016 2016 2016

*COMPLETED SALES

OFF PLAN SALES

85

278

89

168

93

45

131

100

92

46

490637

T O T A L

APARTMENTS

PALMJUMEIRAH

/PREMIUMQ3Q3 2015 2016TO

Source:DLD

201621.

201622.

RENTAL MARKET5/IN 2016Despite the leveling off of the market, there remains a strong interest in buying real estate in Dubai, however, the majority of expatriates continue to prefer to rent rather than owntheir homes.

The property clock illustrates where JLL estimates each prime market is within its individual rental cycle at the end of the relevant quarter.

NOTE

As a result, rents have fallen far less than prices in the current cycle. JLL’s property clock shows the rental market peaked during 2014 and has fallen for the past 18 months.

DUBAI PRIME RENTAL CLOCKRESIDENTIAL MARKET (Q3)

RENTAL GROWTHSLOWING

RENTAL GROWTHACCELERATING

RENTSBOTTOMING OUT

RENTSFALLING

2014

2008

2015

2009

2010

2011

20162012

2013

CONTRIBUTING

SALE PRICE SHIFTS

TO THE DECLINE INPRICES IN 2016Slowdown in the UAE economy (GDP growth went from 4.0% in 2015 to 2.3% in 2016.) This was largely due to the decline in oil prices (which almost halvedin 2015).

Lower oil prices have also resulted in less investment from surrounding GCC nations – a major source of capital for the Dubai residential market.

Ample levels of new supply anticipated despite developers holding some projects offthe market.

Continued strengthening in value of the US dollar has made Dubai less attractive to manyoverseas investors.

Restrictions on mortgages as part of the UAE Government’s successful attempt to cool the housing market and prevent another bubble from developing (as it had from 2006 to 2008).


MARKET LEVELING OFF IN 2016

Source:JLL

Source:dubizzle

Dubai Land - Motor CityApartments

Dubai Land - Sports CityApartments

Jumeirah Village CircleApartments

Jumeirah Village TriangleVillas

Al Furjan Apartments

Jumeirah Lake TowersApartments

Dubai MarinaApartments

Palm JumeirahApartments

Downtown DubaiApartments

Jumeirah Islands Villas

Emirates Living - SpringsVillas

Emirates Living - MeadowsVillas

3000

2250

1500

750

Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 20160

SALE

PRI

CE P

ER SQ

FT

201623.

SUMMARY ON 2016FOCUS ON6/

RENTAL MARKET:SELECTEDCOMMUNITIES

Data from dubizzle shows that average asking rentals across Dubai declined by 4% over the past year, but that over the third quarter of 2016, rental levels remained largely unchanged, leading us to conclude that the rental market is bottoming out. While it is always hard to recognize the precise bottom of a cycle until after the market recovers again, we feel that there is limited further downside potential in rentals from this point and that average rentals are likely to increase again during 2017.

This data shows that asking rentals have experienced a Y-O-Y decline of 2% for 1BR apartments, 7% for 2BR apartments, and 3% for 3BR apartments. It is not surprising that actual rental prices have declined by more than asking rental prices, as landlords are always reluctant to adjust asking prices downwards in a falling market and often prefer to negotiate deals with tenants at levels below their asking rentals.

Trends in asking sale prices also provide a similar picture of the market poised close to the bottom of its current cycle with no movement in Q3 . 2016

201624.

Data from dubizzle suggests that the mid-market sector has seen a more modest decline in asking sales price per/sqft (-2%) than the premium housing communities (-6%) over the past year. Al Furjan apartments were one of the few property types to experience an increase in sales price per sq.ft. of 3%. Jumeirah Village Triangle villas saw an increase of 1%. Both now selling at approximately AED 985.5/sq.ft.

On the other hand, asking sale price/sqft of apartments in Dubai Marina experienced the biggest dip of 15% Y-O-Y but in Palm Jumeirah apartment asking sales prices decreased by only about 1%.


201625.

201626.

CONTINUED..

ALL NUMBERS ARE ASKINGRENTALS IN AED PER ANNUM

Q3 Q32015 2016TO







1BR

1BR

1BR

1BR

1BR

1BR

1BR

1BR

1BR

1BR

1BR

1BR

1BR

1BR

1BR

2BR

2BR

2BR

2BR

2BR

2BR

2BR

2BR

2BR

2BR

2BR

2BR

2BR

2BR

2BR

3BR

3BR

3BR

3BR

3BR

3BR

3BR

3BR

3BR

3BR

3BR

3BR

3BR

3BR

3BR

80K

70K

68K

80K

70K

68K

80K

68K

69K

80K

68K

68K

80K

68K

65K

120K

105K

105K

122K

100K

100K

120K

100K

95K

125K

105K

95K

120K

95K

95K

165K

150K

135K

160K

140K

145K

160K

140K

145K

160K

145K

120K

160K

135K

125K

Q3

Q3

Q3

Q4

Q4

Q4

Q1

Q1

Q1

Q2

Q2

Q2

Q3

Q3

Q3

2015

2015

2015

2015

2015

2015

2016

2016

2016

2016

2016

2016

2016

2016

2016

1BR

1BR

1BR

1BR

1BR

1BR

1BR

1BR

1BR

1BR

2BR

2BR

2BR

2BR

2BR

2BR

2BR

2BR

2BR

2BR

3BR 3BR

3BR

3BR

3BR 3BR 3BR

3BR

3BR

3BR

3BR

3BR

3BR

3BR

3BR

90K

80K

90K

77K

88K

88K

85K

75K

85K

80K

130K

143K

125K

115K

122K

110K

120K

105K

120K

115K

170K 160K

162K

135K

173K 175K 175K

160K

140K

160K

135K

155K

130K

160K

135K

Q3

Q3

Q3

Q4

Q4

Q4

Q1

Q1

Q1

Q2

Q2

Q2

Q3

Q3

Q3

2015

2015

2015

2015

2015

2015

2016

2016

2016

2016

2016

2016

2016

2016

2016

RENTAL PRICE TRENDS ANALYSIS

MID-MARKET

DUBAILAND-MOTORCITY

JUMEIRAHVILLAGECIRCLE(JVC)

JUMEIRAHLAKETOWERS(JLT)


ALFURJAN

APARTMENTS


APARTMENTSAPARTMENTS

JUMEIRAHVILLAGETRIANGLE(JVT)

VILLAS

Source:dubizzle

Source:dubizzle

PRICE DECREASE PRICE DECREASEPRICE INCREASE PRICE INCREASEPRICE IS NEUTRAL PRICE IS NEUTRAL

201627.

201628.

CONTINUED..








RENTAL PRICES TREND ANALYSIS

/PREMIUMQ3 Q32015 2016TO

DUBAIMARINA

DOWNTOWNDUBAI

PALMJUMEIRAH

1BR

1BR

1BR

1BR

1BR

1BR

1BR

1BR

1BR

1BR

1BR

1BR

1BR

1BR

1BR

2BR

2BR

2BR

2BR

2BR

2BR

2BR

2BR

2BR

2BR

2BR

2BR

2BR

2BR

2BR

3BR

3BR

3BR

3BR

3BR

3BR

3BR

3BR

3BR

3BR

3BR

3BR

3BR

3BR

3BR

100K

115K

145K

100K

115K

145K

95K

115K

146K

95K

113K

145K

95K

115K

150K

150K

170K

179K

145K

169K

185K

140K

170K

185K

140K

170K

180K

140K

165K

180K

205K

285K

230K

205K

280K

235K

210K

280K

250K

205K

276K

235K

200K

280K

230K

Q3

Q3

Q3

Q4

Q4

Q4

Q1

Q1

Q1

Q2

Q2

Q2

Q3

Q3

Q3

2015

2015

2015

2015

2015

2015

2016

2016

2016

2016

2016

2016

2016

2016

2016

JUMEIRAHISLANDS

EMIRATESLIVING-SPRINGS

EMIRATESLIVING-MEADOWS

3BR

3BR

3BR

3BR

3BR

3BR

3BR

3BR

3BR

3BR

3BR

3BR

3BR

3BR

3BR

250K

190K

230K

248K

180K

230K

180K

180K

225K

255K

180K

225K

320K

180K

230K

Q3

Q3

Q3

Q4

Q4

Q4

Q1

Q1

Q1

Q2

Q2

Q2

Q3

Q3

Q3

2015

2015

2015

2015

2015

2015

2016

2016

2016

2016

2016

2016

2016

2016

2016

APARTMENTS

APARTMENTS

APARTMENTS

VILLAS

VILLAS

VILLAS

Source:dubizzle

Source:dubizzle

PRICE DECREASE PRICE DECREASEPRICE INCREASE PRICE INCREASEPRICE IS NEUTRAL PRICE IS NEUTRAL

201629.

DANGER OFFUTUREOVERSUPPLY?

There has been an average of 14,000 units completed per annum across the Dubai residential market over the past 6 years ( ). This suggests the market can absorb between 10 and 15 k of additional units in response to continued population growth and demographic changes.

While developers are currently indicating that they plan to complete around 30,000 units in 2017, recent history would suggest that not all of these unitswill materialize. Developers in Dubai have historically been over ambitious in terms of delivery, with only 35% of the units scheduled for completion over the past 5 years actually being delivered within their scheduled year of completion.

We see little likelihood of an improved rate of materialization in 2017, with a number of the planned deliveries likely to be delayed. While a negative for developers’ cash flows and the expectations of purchasers, the low level of materialization is likely to be a positive for the overall market, as it will ensure that the potential oversupply of units will be avoided.

201630.

7/

394 409 425 434 449 456467

1130 16

2

478508

523525

RESIDENTIAL SUPPLY

Completed (thousand units)

Under Contruction(thousand units)

2010 201420122011 2015 2016 2017 2018 2019 20202013 Construction delays due to material shortages or competitionfor resources.

Delays in obtaining approvals and statutory permits.

Lack of financial penalties for delayed completion.

Contractual disputes between developers and contractors.

Rescheduling of projects by developers to avoid floodingthe market.

REASONS FOR

LOW LEVEL OFMATERIALIZATION ARE

PROJECT DELAYS ANDTHE CORRESPONDING

VARIED AND INCLUDE:-


2010-2016

Source:JLL

201631.

UNITSCOMPLETED

UNITSCOMPLETED

201632.

CONTINUED..

KEY COMMUNITIES-RECENT COMPLETIONS AND FUTURE SUPPLY


335

1042

2312

416

320

1987

987

200

109821

1766

1191

1206

358

1710

1176

798

379

430

0

0

0

0

0

0

0

0

2011

2011

2011

2011

2011

2015

2015

2015

2015

2015

2013

2013

2013

2013

2013

2012

2012

2012

2012

2012

2016

2016

2016

2016

2016

2014

2014

2014

2014

2014

Al Furjan

Burj DubaiDowntown

DubaiMarina

Dubai Sports City

JLT

1265*Total Units

9281*Total Units

26186*Total Units

7288*Total Units

12227*Total Units

0 0 0

31

23992760

1593

250

84

1092 713 50014

216

680

192 203

0 0 0 0

0 00

0 0

0

2011

2011

2011

2011

2015

2015

2015

2015

2013

2013

2013

2013

2012

2012

2012

2012

2016

2016

2016

2016

2014

2014

2014

2014

JumeirahVillage Circle

JumeirahIslands

JumeirahVillage

Triangle

PalmJumeirah

851*Total Units

8520*Total Units

2273*Total Units

8617*Total Units

Source:JLL

Source:JLL

* TOTAL UNITS REFER TO UNITS DELIVERED SINCE THE LAUNCH OF THE COMMUNITY, EVEN PRIOR TO 2011. * TOTAL UNITS REFER TO UNITS DELIVERED SINCE THE LAUNCH OF THE COMMUNITY, EVEN PRIOR TO 2011.

201633.

UNITS UNDERCONSTRUCTION

0

201634.

Over the next 3 years Jumeirah Village Circle will see significant development with 2,200 units under construction up until 2019. Demand is growing for more affordable units in JVC and neighbouring communities within Dubai Land which offer better value for money and larger units than in locations closer to the coast.**

The newest area to emerge over the past year has been Dubai South, where 1,600 units are currently scheduled to be completed by 2020. More residential projects are expected to be announced in this location in 2017, as preparation for the Expo 2020 picks up momentum.

Most of the upcoming residential supply in the selected communities will be in the form of apartments. Even in communities that are traditionally mostly villas, such as Al Furjan, more apartments than villas are expected to be completed in the next few years.

The Y-O-Y increase in residential supply across the selected communities from 2017 to 2019 averages to 4% p.a. compared to an average of 3% p.a. in previous years. However, not all of this potential supply is likely to materialize as developers might phase the release of projects in line with demand, as they have in the recent years.

Future supply is highest in the Marina and Downtown areas.While there remains stronginterest in these prime locations, this supply will provide buyers with more choice and may restrict the potential for prices to increase in 2017. However, Dubai Marina still remained dominant in popularity with 24 million searchesmade by users in the last quarter.


1BR/COMMUNITYAVERAGE SIZE OF

671 651

313

158

3300

1196

455

752 2772

18 1150

544

10972

0

0

0

2016

2016

2016

2016

2011

2016

2011

2016

2016

2017

2017

2017

2017

2012

2017

2012

2017

2017

Al Furjan

JLT

DubaiMarina

1322Total Units

3613Total Units

158Total Units

1196Total Units

455Total Units

3524Total Units

1168Total Units

544Total Units

181Total Units

DowntownDubai

DubaiSports City

JumeirahVillage

Trianlge

DubaiSouth

PalmJumeirah

JumeirahVillage Circle

Source:JLL

854 864 895 910 914 930 1052 1263DUBAI MARINA JUMEIRAH LAKE

TOWERSAL FURJAN DOWNTOWN

DUBAIJUMEIRAH VILLAGECIRCLE

DUBAI LAND-SPORTS CITY

DUBAI LAND-MOTOR CITY

PALM JUMEIRAH

APARTMENTS

PREMIUMMID-MARKET

201635.

OFF-PLAN VS.8/

9/SECONDARY MARKET-WHICH ONE ISFAIRING BETTER?Transactions of completed units have declined significantly over the past year. There were more than 11,200 existing apartments sold across Dubai in the 9 months to September 2015. Over the same period in 2016, this figure fell to around 8,100 apartments (a fallof around 30%).

Sales of off-plan units have also declined over the past year, but at a slower rate than that of existing stock. Across Dubai, 14,500 off-plan units were sold over the 9 months to September 2015, with this total falling to around 11,900 units in the same 9-month period of 2016 (representing a declineof around 18%.)

Off-plan sales within the selected communities have held up much better than the overall market,with the total number sold increasing marginally from 4,900 between Jan - Sept 2015, to around 5,200 in the corresponding period in 2016.

The level of off-plan unit sales increased significantly Y-o-Y in mid-market communities such as Jebel Ali First (JAF), Al Furjan, Discovery Gardens, Dubai South, and Jumeirah Village Triangle. Off-plan transactions in premium communities remained high in areas such as Downtown Dubai, JLT, Jumeirah Park and Jumeirah Islands, but fell compared to 2015 levels in Dubai Marina and Palm Jumeirah.

201636.

PROSPEC TS FOR2017Rental and sale prices have remained largely unchanged in the selected communities and the overall market over the past quarter as the market reaches the bottom of its current cycle.

We believe that the market will begin to recover during 2017 due to the following factors:-

While moving into the upturn stage of its cycle in 2017, we do not expect the Dubai residential sector to experience a rapid increase in prices in 2017, with increases in most areas likely to remain in single digits.

The greatest threats to this recovery in 2017 would be a further slowdown in the Dubai economy (which is currently forecast to increase by slightly more in 2017 than in 2016), or a major improvement in the materialization rate which could lead to oversupply and a subsequent weakening of performance in some locations.

Gradual recovery of oil prices

Stronger confidence as investors recognise market is close to cyclical trough.

Continued government investment in hospitality, aviation, healthcare and other growth sectors

Increased construction activity in lead up to Expo 2020

Further improvements to regulatory environment and transparency of real estate market


201637.


DATA

SOUR

CES

CONT

ACT U

SDATA SOURCED FROMFOR QUESTIONS ANDINQUIRIES ON THEREAL ESTATE MARKET, PLEASE CONTACT:

DATA REFERENCEDAND ANALYZEDY-O-Y (2016-2015) Sale & Rent Price data for key communities (in the affordable & premium housing segment)

Y-O-Y residential supply trends

Y-O-Y volume of sales & RE transaction values

Health of the rent and sale property market & factors that affect the prices

Millennial buyer andtenant sentiment

Supply trends and key communities

dubizzle

From dubizzle:

From JLL:

Dubai Land Department (DLD), and Dubai EconomicDepartment (DED) Dubai Land Department (DLD)Published reports onwww.dubailand.gov.ae

Third party data from REIDIN, Property Monitor andother sources

Type:Sale and Rent asking prices Average Property SizesQuarterly Search Volumes

Ann BoothelloSenior Product Marketing [email protected]

Craig Plumb Head of [email protected]

Kathryn AthreyaHead of Marketing & [email protected]

Rana [email protected]

[email protected]

For media inquiries,please contact:

OrOr

Abdallah TouqanDirector PR, Communications & Events dubizzle [email protected]

Grayling [email protected]

Type:Proprietary Supply Data

Exclusive Data Collaboration Partner: JLL

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WISHING YOU A PRODUCTIVEYEAR AHEAD!

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