Sale prices and rental costs for the most expensive homes in Dubai were significantly lower in the first three months of this year compared with 2016 as companies hired top-level staff at a slower rate.
Prices for apartments in Dubai’s Burj Khalifa have dropped by about a quarter on the secondary market over the past 12 months, highlighting the weakening demand for luxury property, according to a new report by the property consultancy Cluttons.
The company says that prices for units in Emaar Properties’ flagship tower dropped by 6.9 per cent between the beginning of the year and the end of March, which it said was indicative of a much broader aversion to luxury homes.
In the first quarter, prices for Hattan Villas at The Lakes have dropped by 13.5 per cent year-on-year and the Hattan Villas at Arabian Ranches have dropped by 12.6 per cent. Apartment prices on the Palm Jumeirah have fallen by 11 per cent.
The company said that the market softness stems from a lack of demand as a result of underlying affordability issues and continued uncertainty over the health of the global economy.
“The rate of creation of senior-level executive positions has fallen and this is reflected in the lower level of enquiries and budgets we are recording,” said Faisal Durrani, Cluttons’ head of research.
“The redundancy programmes in the city’s finance and banking sector and oil and gas sector have all but run their course, but the weak global outlook is putting other key sectors under pressure, including the hospitality and aviation sectors, both of which are long-standing and historic cornerstones of economic growth. ”
Overall, however, the firm said that the rate of price declines was slowing. Prices fell by 0.9 per cent during the first quarter of this year, bringing the year-on-year decline to 7.8 per cent – a slight improvement on the 8.8 per cent falls the firm reported during the 2016 calendar year.
It suggests that the market will bottom out by the end of the year, although it said there are a number of factors that are likely to keep up the downward pressure on prices for now, including changing demands for high-level staff, the introduction of value added tax and concerns over increasing supply, which is affecting rents.
For instance, completions of the Mira town houses and villas at Emaar Properties’ Reem Community are affecting the more mature Arabian Ranches community next door.
About 1,200 units have been handed over at Mira over the past six months. These are generally renting for Dh120,000 to Dh140,000 a year, compared with typical rents of Dh170,000 to Dh220,000 at Arabian Ranches.
Cluttons said that tenants were “aware of the burgeoning rental supply levels and are taking advantage of conditions by seeking out the best perceived value for money”.
Rival property broker CBRE also reported on Sunday that house prices and rents in Dubai both fell by about 1 per cent during the first three months of the year.
CBRE reported that a rush from Dubai developers to build thousands of new apartments before the start of Expo 2020 was pushing up the number of new homes due to be delivered in 2017 and 2018 to “well above” the five-year average of 15,000. It said it expected these numbers to continue to rise in the short to medium term as new master plans come on stream.
CBRE said fierce competition to sell off-plan apartments meant developers were building smaller units so that they could offer cheaper deals and offering attractive payment plans where buyers were only required to pay most of the costs after the property was built.
“Amid a flurry of off-plan launches the competition to attract investors is also rising, meaning developers are having to become more creative in order to sustain desired levels of sales velocity,” said Simon Townsend, a director at CBRE.
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A MINECRAFT MOVIE
Director: Jared Hess
Starring: Jack Black, Jennifer Coolidge, Jason Momoa
Rating: 3/5
Rocketman
Director: Dexter Fletcher
Starring: Taron Egerton, Richard Madden, Jamie Bell
Rating: 3 out of 5 stars
NO OTHER LAND
Director: Basel Adra, Yuval Abraham, Rachel Szor, Hamdan Ballal
Stars: Basel Adra, Yuval Abraham
Rating: 3.5/5
Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
SERIE A FIXTURES
Friday Sassuolo v Benevento (Kick-off 11.45pm)
Saturday Crotone v Spezia (6pm), Torino v Udinese (9pm), Lazio v Verona (11.45pm)
Sunday Cagliari v Inter Milan (3.30pm), Atalanta v Fiorentina (6pm), Napoli v Sampdoria (6pm), Bologna v Roma (6pm), Genoa v Juventus (9pm), AC Milan v Parma (11.45pm)
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How to avoid crypto fraud
- Use unique usernames and passwords while enabling multi-factor authentication.
- Use an offline private key, a physical device that requires manual activation, whenever you access your wallet.
- Avoid suspicious social media ads promoting fraudulent schemes.
- Only invest in crypto projects that you fully understand.
- Critically assess whether a project’s promises or returns seem too good to be true.
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- Store funds in hardware wallets as opposed to online exchanges.
SCHEDULE
Saturday, April 20: 11am to 7pm - Abu Dhabi World Jiu-Jitsu Festival and Para jiu-jitsu.
Sunday, April 21: 11am to 6pm - Abu Dhabi World Youth (female) Jiu-Jitsu Championship.
Monday, April 22: 11am to 6pm - Abu Dhabi World Youth (male) Jiu-Jitsu Championship.
Tuesday, April 23: 11am-6pm Abu Dhabi World Masters Jiu-Jitsu Championship.
Wednesday, April 24: 11am-6pm Abu Dhabi World Professional Jiu-Jitsu Championship.
Thursday, April 25: 11am-5pm Abu Dhabi World Professional Jiu-Jitsu Championship.
Friday, April 26: 3pm to 6pm Finals of the Abu Dhabi World Professional Jiu-Jitsu Championship.
Saturday, April 27: 4pm and 8pm awards ceremony.
At a glance
Global events: Much of the UK’s economic woes were blamed on “increased global uncertainty”, which can be interpreted as the economic impact of the Ukraine war and the uncertainty over Donald Trump’s tariffs.
Growth forecasts: Cut for 2025 from 2 per cent to 1 per cent. The OBR watchdog also estimated inflation will average 3.2 per cent this year
Welfare: Universal credit health element cut by 50 per cent and frozen for new claimants, building on cuts to the disability and incapacity bill set out earlier this month
Spending cuts: Overall day-to day-spending across government cut by £6.1bn in 2029-30
Tax evasion: Steps to crack down on tax evasion to raise “£6.5bn per year” for the public purse
Defence: New high-tech weaponry, upgrading HM Naval Base in Portsmouth
Housing: Housebuilding to reach its highest in 40 years, with planning reforms helping generate an extra £3.4bn for public finances
Our family matters legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
Round 3: February 7-9, Dubai Autodrome – Dubai
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
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WHAT IS A BLACK HOLE?
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MATCH INFO
Champions League quarter-final, first leg
Ajax v Juventus, Wednesday, 11pm (UAE)
Match on BeIN Sports
