Dubizzle’s first northern emirates property report, comparing rental and sale price trends in the first quarter of 2016 to the same period last year across Dubai, Sharjah and Ajman, indicates that the property sector in the United Arab Emirates (UAE) has seen an overall decline in prices.
The rental market, however, has experienced less of a decline than the sale sector.
The findings of the report are in line with those witnessed in neighboring emirates, which indicate the housing market is becoming more affordable in general, giving tenants increased bargaining power.
“Through our report, we have noticed that there has been an overall decrease in both rental and sale prices in Sharjah from Q1 2015 to Q1 2016,” Ann Boothello, product marketing manager for property at dubizzle, told Gulf News Journal. “We found that rental prices for one-bedroom apartments dropped by 3.95 percent in Sharjah while Ajman witnessed an overall mild 1.85 percent drop. Ajman is still noted as the most affordable emirate to rent a home. For sale prices, there was a drop by 7 percent in both emirates.”
The results suggest that there is a continued popularity of renting in the northern emirates among Dubai residents due to affordability since the highest rental price for one-bedroom apartments in Ajman is $10,617 annually. The cheapest option in Dubai, referring to the communities dubizzle analyzed in the last quarter, is in International City with an annual rental rate averaging $13,612 for a one-bedroom apartment. The report also found that people who can stretch their budgets would now opt to live in Dubai, although the cities in the northern emirates provide a far more affordable residential options.
In the report, Ajman and Sharjah have seen a knock-on effect of subdued prices, but continue to maintain popularity among mid-to-low income bracket residents. This is attributed to the difference in pricing between Dubai and the northern emirates as mentioned above – for example, the cheapest comparable option in Dubai is 33 to 35 percent more expensive than that in Ajman and Sharjah.
“Key drivers that have influenced these changes in the property sector are the oil price decline, diminished investor sentiment, reduced government spending, continued strength of the U.S. dollar influencing U.S.-pegged currencies and tightening liquidity causing a drop in supply in 2015,” Boothello said .
Despite these factors, Abu Dhabi’s real estate market has remained relatively stable especially in higher grade property. The report indicates a trend is emerging over the past year with the popularity of newer inland communities increasing while more established districts have experienced a drop in price.
In regards to Dubai, Boothello claims that in the near future, there will no longer be a definitive area identified as the center of Dubai; these titles are currently given to Downtown Dubai and Dubai Marina, the more popular self-contained areas in the emirate. Locations such as Al Furjan, Sports City, Motor City, JVC (Jumeirah Village Circle), which essentially are the areas located further inland, will continue to become more viable, and attractive options for residents who wish to live in the “suburbs” of Dubai, as their infrastructure and leisure and entertainment facilities take shape.
“We believe that the data transparency provided to our users support residents and investors in making the right decisions on whether to buy or rent property in the UAE and which community and city would suit their budget,” Boothello said.
Dubizzle published this report using data from the behavior of more than 1.5 million monthly active users on its property section and more than 150,000 advertised properties. They then analyzed the data to identify trends depending on the advertised prices of property ads on dubizzle over the specified duration and measured it against the same quarter of last year.
“As the leading property platform with access to a wealth of data, we believe that it is our duty to provide our users and residents of the UAE with a transparent view of the property market, so they can make well-informed decisions when budgeting to buy or rent a home.” Boothello said.