8 June 2018
Dubai: The Price Right
When we look at the sub 1 million price point in the apartment space, the evolution of purchases mirrors that of the overall market; in that there is a steady progression of purchases in the off plan space (from a roughly even position in 2015 to a 1/3rd share in 2017); although in the first quarter of 2018 there appears to be a reversal of sorts as purchases in the secondary market has ticked higher as price gaps between the primary and secondary markets widened. In the villa space, the change in trend has been even more pronounced; nearly 90% of the transactions were conducted in the secondary market in 2015; that has since halved as developers have offered a suite of incentives for the villa space in this price point in a plethora of horizontal gated communities.
Two trends are clear: 1) as you move up the price points, the ratio of sales appears to progressively lean towards the ready market, meaning that buyers have responded to the price drops and that developer incentives for the off plan market are not working as effectively. 2) where they have worked, it has been in an environment where there has been genuine value on display (As evidenced by the recent seven tides launch).
Buyers would be well served if they keep monitoring the price gaps between the primary and secondary markets as a way to ascertain the future price curve trajectory.
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