A continued focus on affordability in the UAE's residential sales market currently remains, with prices in Dubai dropping by 5% year-on-year and transaction levels declining by 17%, according to Asteco.
John Stevens, managing director, Asteco, said: "This market has moved favourably towards the buyer as prices drop and cash investors and end-users find themselves in a strong negotiating position. Buyers are definitely considering their investment options as the market appears to be bottoming out and sellers seem prepared to take a more realistic view on pricing."
The most transacted areas in value terms were Dubai Marina, Palm Jumeirah and Downtown Dubai, however apartment sales prices were down 6% on the Palm Jumeirah and 4% in both the Marina and Downtown in Q1 2016.
International City had the highest number of transactions recorded in the quarter with a corresponding 1% increase in prices, further underscoring the demand for affordable housing. IMPZ, and Jumeirah Village also notched quarter-on-quarter increases of 4% and 5% respectively.
The villa market experienced a similar trend with sales prices down on average 6%, compared to last year and 2% when compared with Q4 2015. Buyer interest at the higher end of the market was limited and communities such as Jumeirah Golf Estates, The Villa and larger sized villas in Arabian Ranches saw sales prices drop by 14%, 11% and 13% based on last year's prices.
"Newly launched properties with more affordable price points and payment plans are attracting investment interest and are selling very well. The reputation of the developer is also playing a major role as investors and end users want to be certain that their properties will be delivered as agreed and the required infrastructure and community facilities completed," added Stevens.
In Abu Dhabi sales demand for both apartments and villas was stunted. The popular Saadiyat Island and Al Raha Beach recorded price increases of 2% and 6%, however these increases can be attributed to the limited available stock.
Villa transaction levels in Abu Dhabi were limited in Q1 2016, following strong demand throughout 2015, particularly in the more affordable communities in Al Raha Gardens and Al Reef.
"Sales for new launches, which slowed down in 2015, are expected to pick up once buildings come closer to handover, we anticipate that this will more than likely be a 2017 scenario. The signs are already promising with Yas Acres by Aldar and Saadiyat Lagoons District by TDIC and Al Faya at Bloom Gardens development by Bloom Properties, all launched in Q1 2016," said Stevens.
The Northern Emirates are also attracting strong interest with a number of significant projects being planned and announced particularly in the tourism and residential sectors.
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