A Brief History of the Dubai property market
On the day where the UAE is celebrating 48 years of the union of the Emirates, now is a good time to look back at Dubai's property industries' successful short history.
It would be fair to say that Dubai's property market started in 2002 when HRH Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai declared freehold rights for owning property for non-nationals. At the time according to the Dubai Statistics Centre the population of Dubai was 1,010,751, 75% of which were ex-pat/non-nationals.
From 2003 Dubai's property supply accelerated and spread across the Emirate instead of the supply being located in the Creek Area, 3,364 properties were completed in Emirates Living. 2004 saw 5 new projects sold in the Marina amounting to 654 apartments which were the catalyst for one the most popular areas to live and only 15 years on is nearing the end of construction and is a vibrant completed community. 2005 Arabian Ranches handed over 829 properties and the Marina a further 319 apartments.
In 2006 Emirates Living expanded by a further 5,990 properties and in the Marina 3,555 apartments were handed over. 2007 saw the introduction of Jumeirah Lake Towers with 2,665 apartments completed, 2,153 apartments in the Marina and 1,393 more units in Arabian Ranches. 2008 and 2009 saw a combined 52,297 properties come onto the market 2,409 on the newly formed Palm Jumeirah, the first 'affordable' properties in Discovery Gardens amounting to a staggering 25,412 apartments, Dubai Silicon Oasis 1,425 properties and 6,250 in Jumeirah Lake Towers.
At the peak of Dubai's property boom in 2007 RERA (Real Estate Regulatory Authority) was formed which brought various Rules and Regulations that streamlined transactions and registrations of ownership for land/property in Dubai.
In 2008, for the first time, the property transaction was made available to the public, at the time property prices across Dubai were an average of AED2,197,956 for villas/townhouses and an average of AED1,375,068 for apartments. Oqood was also launched in 2008 after law 13 was imposed which laid out a number of responsibilities for the Developer to adhere to and pathed the way for off-plan registrations (Oqood).
2009 saw the collapse of major banks around the World closed down and billions of dollars were lost globally in all sectors. Unfortunately, it impacted the Dubai property market around 2010 villa/townhouses saw a drop of over 8% in 12 months and apartment sale prices saw a drop of 49% (average price of an apartment across Dubai (AED698,280).
In Q2, 2015, the prices saw an increase from 2010, the average of villa/townhouses rose by 13.3% and apartments rose by a further 37%. All in all 2015 average prices of all transferred residential property surpassed pre-crash prices.
Apartments have experienced a steady drop in prices from Q4, 2016 until bottoming out through to the beginning of 2019. Villa/townhouses prices dropped at the beginning of 2016 but saw a 9-month peak until dropping in Q4 of 2018 to an average sale price of AED1,825,843.
In November 2019 an average sold price for an apartment on the secondary market was AED1,668,451 and for a villa/townhouse AED3,247,207.
To summarise the above is a rough timeline to show how quickly the Dubai market recovers and stabilizes, but these figures represent all of Dubai, different areas have seen different results. The figures are also influenced by the 2008’s registrations of Oqood, Off Plan Registrations and, most importantly, supply and demand in the Emirate.
In my opinion, the market will largely remain stable in developed communities for 2020, strongly dependant on there being no further supply of property on the market, we should see an increase in prices within the next 18 - 24 months in completed communities, which will be mainly due to lack of land bank. 2019 was a very important year for the property market with the introduction of Strategic Land at the Dubai Land Department with the role of moderating releases of properties in line with demand.
Please let me know if you have any questions or would like to discuss any aspect of the Dubai Property Market and Happy 48th National Day.
Laura Adams Managing Director Carlton Real Estate
data from propertymonitor.ae