Q3 2016 Dubai Residential Market Report by cavendish_maxwell

Dubai Residential Market Report

2016

cavendishmaxwell.com

Dubai Residential Market Report - Q3 2016

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Foreword Cavendish Maxwell is a highly respected independent firm of chartered surveyors and property consultants, focusing on property services throughout the Middle East and Africa. Established in 2008, Cavendish Maxwell has grown into one of the regionâ&#x20AC;&#x2122;s largest and highest profile property companies, employing over 60 people across 8 departments. Our experience covers property, land and business asset valuations; investment; asset management; disposals and acquisitions; rent reviews; lease renewals; development appraisals; advisory services; market research; feasibility studies; project management and building consultancy.

The Cavendish Maxwell Quarterly Residential Market Report for Dubai provides analysis and summary of the apartment and villa properties, highlighting the price movement, rent and yield scenario, residential supply as well as the macro-economic factors impacting this segment. The report also incorporates the Cavendish Maxwell Residential Market Survey conducted among agents operating within Dubai. The survey showcases how new enquiries, leasing activity and transactions, among other metrics, changed over the previous quarter and also provides an outlook on the following quarter, with predictions by professionals being studied against real performance.

Dubai residential market highlights Average price movement

Residential supply

Quarter on Quarter % change

Q4 2016 Pipeline

-0.4% -0.3%

26,500 scheduled units

12 month % change

Q3 2016 Completions

-3.1% -4.6%

5,570 units

Content Macro-economic factors

Rent performance

Investment climate

Residential supply

Price performance

Residential Market Survey

ÂŠ Cavendish Maxwell 2016 | www.cavendishmaxwell.com

Dubai Residential Market Report - Q3 2016

Macro-economic factors Figure 1

Dubai Annual Inflation- -2016 2016 Dubai annual inflation

• The increase in Consumer Price Index (CPI) for Dubai in July was primarily the result of an increase in school fees, which impacted the increase in prices of the education group by 6.74%.

128.0 127.5 127.0 126.5 126.0 125.5 125.0 124.5 124.0 123.5 123.0

2.5 2.0 1.5 1.0 0.5

Jan

• On an annual basis, prices in the residency, water, electricity, gas and fuel group showed an increase of 3.45%.

• According to WTTC, the UAE government’s expenditure on travel and tourism development is expected to grow by 2.2% this year and by 4.3% per annum over the next decade.

0.0

Inflation Rate

25.0

4.0

20.0

3.0

15.0

2.0

10.0

1.0

5.0

0.0

2013

2014

Real GDP

2015E

2016P

% of GDP

5.0

0.0

2017P

Current Account Balance (as % of GDP) Source: IMF, July 2016

Figure 3

Currency movement Currency Movement 1.2

70 68

66 62

0.6

USD/INR

0.8

0.4

0.2

USD/GBP

Jul-16

Sep-16

May-16

Jan-16

Mar-16

Sep-15

Nov-15

Jul-15

Mar-15

USD/EUR

May-15

52 Jan-15

0 Sep-14

• According to a report released by World Travel and Tourism Council (WTTC) in August, the growth in expenditure by foreign tourists in UAE will slow down to 3.3% touching USD 26.9bn, only marginally higher than last year when it stood at USD 26bn and grew at 4.3% over 2014.

June

UAE - GDP forecast UAE - GDP forecast

Nov-14

• For the UAE, a strengthening of the dollar, to which the dirham is pegged, could impact tourist inflow. The depreciation of currencies such as euro, pound and rouble will limit spending capacity of visitors from these regions.

May

Source: Dubai Statistics Centre

Jul-14

The US dollar recovered in mid-September with odds of a rate hike moving to December amidst warnings about Chinese economy and low rate of consumer price growth in the US.

Apr

Figure 2

May-14

• The IMF predicts economic activity will moderate this year before improving over the medium term. “Nonhydrocarbon growth is projected to slow to 2.4% in 2016 due to fiscal consolidation, the stronger dollar, and tighter monetary and financial conditions. Over the medium-term, nonhydrocarbon growth is forecast to increase to above 4% as the dampening effect of fiscal consolidation is offset by improvements in economic sentiment and financial conditions as oil prices rise, a pickup in private investment in the run-up to the Expo 2020, and stronger external demand,” the IMF said in a statement in July.

Mar

*2007=100

Real GDP

• The IMF recommended that the UAE should balance the budget deficits through its financial reserves and ease the spending cuts put into force recently.

Feb

CPI

USD/EUR, USD/GBP

As of July, the International Monetary Fund (IMF) has forecast UAE’s GDP to grow by 2.3% this year, down from the 4% growth of last year.

Inflation rate

CPI

Annual inflation index of goods and services in the consumer basket in Dubai increased 0.33% in July 2016 compared to June.

USD/INR

Source: Cavendish Maxwell research

Figure 4

UAE petrolUAE & diesel prices Petrol & Diesel Prices 2.4 2.2 AED/ litre

• An IMF working paper released in August titled ‘The impact of oil prices on the banking system in the GCC’ cited linkages between oil price movements and bank performance. The paper highlighted how oil price rise leads to higher oil revenues and therefore stronger fiscal and external positions for banks. It also enables investors to receive higher returns from the equity market given the positive impact on corporate growth alongside a rise in government spending. This in turn improves non-oil output growth, banking sector liquidity and credit growth, real estate prices and stronger bank balance sheets. With an oil price slide all these factors can reverse.

In September, both the International Energy Agency (IEA) and OPEC revised forecasts for oil prices stating that the slowdown could persist for much longer than expected. • The IEA highlighted that a sharp slowdown in demand and increasing inventories are contributing to oversupply in the market, which is expected to continue through the first half of next year. OPEC also highlighted the oversupply issue, with output from non-member countries set to increase. • Oil companies have been grappling with weaker finances following spending cuts. They are expected to curtail expenses further into the new year because of the price slump.

Deposits by resident Non-Banking Financial Institutions have decreased 32% year-onyear as per UAE Central Bank data for June.

1.6 1.4 1.2 g15 p15 O ct -1 N 5 ov -1 5 De c15 Ja n16 Fe b16 M ar -1 6 Ap r-1 M 6 ay -1 6 Ju n16 Ju l-1 Au 6 g16

1.0 Au

• Oil price performance has historically been an important driver of business growth in the GCC, with contraction in liquidity and performance of equity markets being closely linked to it. The UAE is less dependent on oil than other GCC countries. However, the tightening of global liquidity conditions and subsequent impact on the real estate sector played a significant role in the 2009 financial crisis.

1.8

Unleaded Petrol 98

Unleaded Petrol 95

Unleaded Petrol 91

Diesel

Source: UAE Ministry of Energy Figure 5

GCC: Dependence on oil revenues 2000-05 2006-10 2011-14 Oil export revenues as % of total exports of goods and services Bahrain 58.7 60.5 65.1 Kuwait 82.7 80.5 87.6 Oman 76.9 69.4 64.3 Qatar 88.5 85.9 88.9 Saudi Arabia 83.4 83.1 83.0 UAE 45.0 38.7 32.6 Fiscal oil revenues as % of total fiscal revenues Bahrain 71.7 82.2 87.2 Kuwait 72.7 79.2 83.6 Oman 83.4 83.4 88.7 Qatar 90.5 88.3 90.7 Saudi Arabia 82.8 88.3 90.3 UAE 60.2 65.1 69.9 Source: IMF Working Paper: The Impact of Oil Prices on the Banking System in the GCC Note: Fiscal data is of the general government for UAE and central government in other GCC countries Figure 6

Global Oil Prices Global oil prices 60 50 USD / barrel

• Petrol prices in the UAE for August 2016 decreased by an average of 8% in comparison to July and have increased by 4% since January 2016.

2.0

Fuel prices decreased in August with Super 98 at AED1.73/litre, Special 95 at AED1.62/litre and E Plus91 at AED1.55/litre. The diesel price was AED1.76/litre for August.

40 30 20 10

• The liquidity support facility of the central bank has decreased from AED514 million in December 2013 to AED228 million in December 2015 and AED200 million in July.

0 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Brent

West Texas

OPEC

Source: Cavendish Maxwell research

Dubai Residential Market Report - Q3 2016

Investment climate Figure 7

1,600

10%

1,200

1,000

-10%

-13% -13%

800 600 -33%

400

-26%

-28%

-20%

-24%

-30% -38% -40%

-42%

200

-50%

0 Ja n

-1 6 b16 M ar -1 6 Ap r-1 6 M ay -1 6 Ju n16 Ju l-1 6 Au g16 Se p16

• In H1 2016, of the total investments in Dubai real estate, AED57 billion worth of transactions were made by foreign investors. • The June vote calling for Britain’s exit from European Union is expected to impact the appetite among British investors for Dubai property. Historically, Britons have been among the top three foreign investors in Dubai real estate. The weakening of sterling is likely to reduce total investment by British citizens.

20%

17%

1,400

• Property sales contributed 46% of the total at AED71 billion, whilst mortgages totaled AED66 billion.

Real Estate Transactions inin Dubai Real estate transactions Dubai

Transaction Volume

Dubai Land Department recorded transactions totaling AED158 billion in the first eight months of 2016.

Land

Building

Unit

YoY % Change in Total Volume

Note: Above values exclude off-plan sales and data for Sep is as of 26th of the month.

Source: Dubai Land Department

Figure 8

The IMF highlighted in a report released

TOP 3 BY REGION GCC investors - UAE – 14.52 billion - KSA – 4 billion - Kuwait – 1 billion

total at the end of March 2016.

Source: Dubai Land Department

Figure 9

Gold Price (USD/oz) Gold price (USD/oz) 1400 1350

1,340 per ounce.

1300

• The Federal Reserve’s move to delay interest rate hikes signaled continuing uncertainty about the global economy and this has led to the gold price rally in the last few months.

1200

• The rally was also fueled by the post-Brexit macro-economic uncertainty. By mid September prices had fallen from three week highs and is now trading in a tight range.

1050

• Gold bullion asset base for the Central Bank of UAE has increased from AED347 million in June 2015 to AED1,195 million in July 2016.

gold price rally, with prices averaging USD

Break-up of total investments

1250

1150 1100

1000 ov -1 5 De c15 Ja n16 Fe b1 M 6 ar -1 6 Ap r-1 M 6 ay -1 6 Ju n16 Ju l-1 Au 6 g16 Se p16

leave interest rates unchanged triggered a

Foreign investors - India – 7 billion - UK – 4 billion - Pakistan – 3 billion

12%

In July the US Federal Reserve’s decision to

49%

Non GCC Arab investors - Jordan – 1.5 billion - Egypt – 1.37 billion - Lebanon – 1.0 billion

• The quality of loans taken by households, which is a measure of financial strain for home buyers, has also improved. The ratio of nonperforming loans to this segment has dropped to 4.9% from 10% over the same period. • The report highlighted that falling property prices in the current cycle are unlikely to pose “systemic risks for the financial sector”, unlike the 2009 crisis where the bursting of the speculative real estate bubble strained balance sheets of banks in the country.

39%

shrank from 12.3% in 2013 to 7.5 % of the

construction and real estate sector in UAE

Real estate investments in Dubai H1 2016

ct -1

in July that non-performing loans in the

Source: Cavendish Maxwell research

The business environment in the UAE received a boost with the approval of the draft bankruptcy law by the cabinet in September.

• At the moment the UAE does not have formal bankruptcy regulations and industry bodies such as the UAE Banks Federation have been lobbying for its introduction. • The UAE is set to formalise the bankruptcy law by the end of this year to enable companies to restructure or wind up their business with regulatory support.

• In Q2 the Dubai Financial Market’s net income fell 60% as a result of declines in trading. • The value of stocks traded on the DFM decreased 33% to AED69.5 billion during the first half of the year compared to AED103.4 billion in the same period last year. • Among real estate stocks, Emaar has been the highest gainer since the beginning of the year with a 27% increase in share price from 1st January to 31st August. Drake and Scull is a close second with a 21% gain in the same period. In comparison, Damac and Union Properties share prices have registered limited gains of under 3%.

Figure 10

• This is expected to improve access to bank funding for businesses and enhance the asset quality of banks.

Share Price Performance Share price performance 8.00 7.00 6.00

companies joined the membership of

5.00

Dubai Chamber of Commerce and Industry

4.00

bringing its total membership to 193,000 with a 4.3% growth over last year. • The Chamber members’ total exports and re-exports reached AED 138 billion with Saudi Arabia ranking as the top destination with members’ exports and re-exports at AED 44 billion. • The Chamber registered a growth of 2% in the issuance of certificates of origin in the first half of this year totaling more than 478,000, compared to 469,000 COOs issued during the same period last year.

AED

In the first half of 2016, over 8,000 new

3.00 2.00 1.00 0.00 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Arabtec Holding

Deyaar

Drake & Scull

Emaar

Union Properties

Damac

Source: Cavendish Maxwell research

• The Chamber is also preparing to launch its new strategy for 20162021 in line with the Dubai Plan 2021.

Nasdaq Dubai announced the launch of equity futures in September, with initial offerings including futures of traded real estate firms Aldar and Emaar Properties.

Dubai Residential Market Report - Q3 2016

ÂŠ Cavendish Maxwell 2016 | www.cavendishmaxwell.com

Â© Cavendish Maxwell 2016 | www.cavendishmaxwell.com

Dubai Residential Market Report - Q3 2016

Price performance Apartments Apartment prices in Dubai declined by 0.4% on average during Q3 2016 and declined by an average of 3% over last 12 months.

Dubai Residential Prices vs. Dubai residential prices vs.Oil oil 120

1,450

100

1,400

1,350

1,300

1,250

1,200

AED per sq ft

• According to Dubai Land Department data released in September, Business Bay and Dubai Marina accounted for the highest number of unit sales during the first eight months of 2016.

Figure 11

USD per barrel

• Residential property prices in Dubai have declined by over 12% since highs in Q2 2014 and 2% on average year-to-date (YTD). This decline was initially triggered by stringent government regulations to deter speculators, currency impact of a strengthening US dollar, weakening Russian rouble, and instability in the region. More recently, the oil price and increasing property supply have been more influential.

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2014 2014 2014 2014 2015 2015 2015 2015 2016 2016 2016

1,150

OPEC Basket Crude Oil Price USD/barrel Dubai Average Residential Sales Rate (AED psf)

Source: Cavendish Maxwell research Figure 12

A pa rtm ent p r ic e p e r f o r m a n c e

Apartment price performance 1,800

-0.2%

-0.2% -1.2%

-2.4% 1,500

-3.9%

-4.2%

-4.1% -4.1%

1,000

500

-0.3% -0.4% 1,600

-0.3% -0.4% -1.3%

Average price AED / sq ft

2,000

-0.5%

Downtown Burj Khalifa*

Palm Jumeirah

1,200

-4.0%

-4.1%

*Excluding Burj Khalifa

-0.6%

-3.9%

0.0%

-2.0%

-3.4% -4.3%

-4.0%

-3.1%

1,000 800

-4.0%

-6.0%

600

-8.0%

400

-10.0%

Jumeirah Dubai Marina Business Bay The 0 Views Beach and Greens Residences

Q3 2016

-0.3%

1,400

200

Q2 2016

-0.3%

QoQ % change Q2 2016 - Q3 2016

Uptown Dubai Sports Discovery Motor City City Gardens Jumeirah Islands

% change

2,500

-12.0% International City Jumeirah (Clusters) Golf Estates

Q2 12 month change Q3 2015 - 2016 Q3 2016 Source: www.propertymonitor.ae

Villas Villa prices decreased marginally in Q3 2016, with an overall average drop of 0.3%. Over the last twelve months villa prices have declined by 4.6% on average.

• Prices in Arabian Ranches, Meadows and Al Furjan have registered the highest twelve month declines. • A two-tier transactional market is emerging for residential properties in Dubai, with budget conscious buyers adopting a “wait and see” strategy while looking for the best deals. These buyers are also likely to be concerned with the geo-political and economic uncertainty, including Brexit and currency devaluations. • The second group of buyers have a long term view with respect to their stay in the UAE and are opting to move up the property ladder with a purchase rather than continuing to rent, subject to being able to meet deposit requirements. For this category of buyers, there are suitable options available in the market at the moment.

Figure 13

V il l a pri c e p e r f o r m a n c e

Villa price Villa priceperformance performance

-0.3% -0.3% -0.3% -0.3%

-0.4% -0.4%

-0.3% -0.3% -0.3% -0.3% -0.3%

0.0% -0.5%

0.0% -0.4% -0.4% -0.4% -0.4%

1,600

-0.4% -0.5% -0.4% -0.4% -0.5%

Average price AED / sq ft

-2.0%

1,200

-2.9% -2.9%

-3.1% 1,000 800

-4.0%

-3.8% -4.8%

-6.4%

2016

-4.4% -4.4%

-4.0%

-4.8% -5.0% -6.0% -6.0%

-6.4% -6.9% -6.9% -6.9%

200

he Lakes

-3.0%

-3.5% -3.5%

600 400

-0.4

-1.0%

1,400

-3.8%

0.0%

JumeirahThe Jumeirah The Lakes Islands Golf Estates Meadows

The Victory Victor y Meadows Heights Heights

Arabian Arabian Jumeirah The Springs Ranches Ranches Park

% change

1,800

-0.4%

-4.4

-6.0% -7.0%

-8.0% Jumeirah Al Furjan Jumeirah Village Park Villas Triangle

Q2 QoQ 2016 % Q3 2016 change QoQ % change Q2Q22016 2016 - Q3 2016 - Q312 2016 month change Q3 2015 - Q3 2016

The Sp

12 month ch

Source: www.propertymonitor.ae

Dubai Residential Market Report - Q3 2016

Rent performance Apartments:

Apartment rents declined between 0.3 and 1.3%, with an overall average decrease of 0.9% during Q3 2016. Investment yields for apartments are 7.5% on average this quarter.

Figure 14

A pa rtm ent re n t p e r f o r m a n ce - Q 3 2 0 1 6 Apartment Rent Performance - Q3 2016

200000

0.0%

180000

-0.2%

140000

-0.4%

-0.4% -0.4% -0.6% -0.6%

120000

-0.5% -0.5% -0.7% -0.7%

100000

-0.7% -0.7%

-0.6%

-0.6% -0.6%

80000

-0.9% -0.9%

-1.0% -1.0%

60000

-1.0%

-1.2% -1.2%

40000

-0.8%

-0.9% -0.9%

-1.2%

-1.2% -1.2% -1.3% -1.3%

20000 0

rs a) ay we alif a ie ee sB en o r h V s T M d K i e G i e s e rj es sin ba Th Re Bu (Th Lak Bu g( Du ch ing ah ea ing r ivin d i v B L i e L clu ah tes Jum tes (ex eir ira ira lifa Em Jum a Em Kh urj nB w to wn Do Studio 1 BR

a rin

) ws

ns)

ces

C DIF

rts

S ai ub

2 BR

y Cit

tor

y Cit

er y ov

isc

s en

ati

ern Int

ity

C al

) ers ust

(Cl

% change

AED per annum

160000

-1.6%

d ilan

-1.4%

Average QoQ% Change

Source: www.propertymonitor.ae Figure 15

Gro s s i nv es t m e n t y i e ld - Gross A pInvestment a r t meYield n t s- Apartments 12.00% 10.00% 8.00% 6.00% 4.00% 2.00% 0.00%

International Dubai Sports City (Clusters) City

Discovery Gardens

Dubailand

Motor City

Jumeirah Emirates Lakes Towers Living (The Greens)

Q2 2016

Emirates Living (The Views)

DIFC

Dubai Marina

Jumeirah Business Bay Downtown Beach Burj Khalifa Residences (excluding Burj Khalifa)

Q3 2016

Source: www.propertymonitor.ae

ÂŠ Cavendish Maxwell 2016 | www.cavendishmaxwell.com

Villas:

Villa rents in Dubai have declined 1.1% on average in Q3 2016, with investment yields for villa communities averaging 5.2% this quarter.

Figure 16

V il l a rent p e r f o r m a n ce – Q 3 2016 Villa Rent Performance – Q3 2016

AED per annum

500,000 -0.4% -0.4% -0.4%

400,000

0.0% 0.0%

-0.5% -0.5%

-1.0% -1.0% -1.3% -1.3% -1.3%

-2.2%

-2.2% -2.2%

Jumeirah Jumeirah Islands Islands

Jumeirah Jumeirah Park Park 33 Bed Bed

-2.0% -2.0%

-2.2% -2.2%

-2.2% Jumeirah Golf Golf Jumeirah Estates Estates

-1.5% -1.5%

-1.6% -1.6% -1.6%

100,000 100,000

0.0%

-0.8% -0.8% -0.8%

300,000

200,000 200,000

0.0%

The The Lakes Lakes 44 Bed Bed

The The Meadows Meadows The TheSprings Springs 5 Bed

% change

Villa Rent Performance - Q3 2016

Arabian Arabian Ranches Ranches

Victory Victory Heights Heights

AlAlFurjan FurjanVillas Villas

-2.5% -2.5%

Average QoQ % Change

Source: www.propertymonitor.ae Figure 17

G ros s i nv est m e n t y i e ld - V ilGross lasInvestment Yield - Villas 8.00% 7.00% 6.00% 5.00% 4.00% 3.00% 2.00% 1.00% 0.00%

The Springs

Victory Heights Arabian Ranches

The Lakes

Jumeirah Park

Q2 2016

Al Furjan Villas

The Meadows

Jumeirah Golf Jumeirah Islands Estates

Q3 2016 Source: www.propertymonitor.ae

Dubai Residential Market Report - Q3 2016

ÂŠ Cavendish Maxwell 2016 | www.cavendishmaxwell.com

Dubai Residential Market Report - Q3 2016

Residential supply Q3 2016 Completions: Approximately 5,570 residential units have been completed during Q3 2016.

• Nearly 81% of the total number of units completed in Q3 were apartments, the majority located in Dubailand, Silicon Oasis and Jumeirah Village Circle.

• New launches during Q3 2016 were apartments, villas and townhouses located in areas such as Al Furjan, Business Bay, Downtown and Dubailand.

• Approximately 3,300 units were delayed from Q3 to Q4.

• A new mixed-use district, Jumeirah Central, was also launched by Dubai Holding. Phase 1 of the development is expected to have nearly 3,000 apartments, scheduled to be completed by September 2020.

• 33% of the units delivered in Q3 2016 were projects delayed from Q2.

Q3 2016 completions - Top 10 locations Figure 18

Units delivered 200 - 400 401 - 600 601 - 800 801 - 1,000

4 5

6 7

10 3 10 21

1 2

1. 2. 3. 4. 5.

Dubailand Dubai Silicon Oasis Jumeirah Village Circle Dubai Marina Jumeirah Lakes Towers

6. 7. 8. 9. 10.

Jumeirah Park Downtown Dubai Sports City International City Jumeirah Village Triangle

Source: Cavendish Maxwell research

4 3

2 1

Pipeline Q4 2016: There are 26,500 units scheduled to complete in Q4 2016, though delays are likely to greatly reduce actual delivery.

• Since the beginning of this year developers have adjusted to the new demand levels, price declines and tightening liquidity conditions, thus delaying delivery of their projects and planning new launches in a phased manner. • The oversupply issue in the residential market continues to put pressure on prices and is primarily a result of projects announced around market peak levels in 2014, with expected handover in 2016-18.

• Nearly 36 projects with 72,000 units planned have been placed on hold between Q4 2014 to Q3 2016. • As the map below highlights, the majority of additional residential units set to be delivered in Q4 2016 are located in Dubailand followed by Dubai Silicon Oasis. • Apartments comprise approximately 60% of the Q4 2016 scheduled supply.

Q4 2016 pipeline - Top 10 locations Figure 19

Units planned 500

- 1,000

1,001 - 1,500 1,501 - 2,000 2,001 - 2,500

2,501 - 3,000 3,001 - 3,500

3,501 - 4,000 7

4,001 - 4,500

4,501 - 5,000

21 10

1 2

1. 2. 3. 4. 5.

Dubailand 9 Dubai Silicon Oasis 8 Dubai Marina 7 City Meydan Jumeirah 6

6. 7. 8. 9. 10.

Dubai Sports City Al Furjan Business Bay International City Jumeirah Village Circle

Source: Cavendish Maxwell research

5 4 3

Dubai Residential Market Report - Q3 2016

Cavendish Maxwell Residential Survey Looking back - Q3 2016

predictions

reality

The majority of agents surveyed had predicted apartment and villa prices to remain unchanged.

Apartment and villa prices have remained largely stable in Q3 2016 with average declines of 0.5% and 0.3% respectively.

The majority of agents had predicted that apartment and villa rents would remain the same during Q3 2016.

Apartment and villa rents have remained largely unchanged with average declines of 1%.

Majority of agents had predicted new buyer enquiries and agreed sales would increase in Q3, while seller instructions would remain the same.

According to Dubai Land Department, transaction levels have increased in August but were lower in July and September compared to first half of the year.

Looking forward - Q4 2016

Figure 20

Figure 22

Q 4 20 1 6 pri c e o u t l o o k Apartments %age of agents who predicted apartment prices would: 0% 11%

Q 4 2 0 1 6 t r an sact ion o u t lo o k

Villas %age of agents who predicted villa prices would: 13%

22%

20%

%age of agents who predicted new buyer enquiries would:

2% 16%

17% 8%

24%

47%

increase by more than 5%

75%

45%

increase by up to 5%

not change

decrease by up to 5%

decrease by more than 5%

%age of agents who predicted new seller instructions would:

Source: Cavendish Maxwell Residential Market Survey

Figure 21

25%

Q 4 20 1 6 rent s o u t l o o k Apartments %age of agents who predicted apartment rents would: 0% 10%

12%

Villas %age of agents who predicted villa rents would: 1%

12%

%age of agents who predicted agreed sales would:

24%

27%

30% 55%

increase by more than 5%

63%

increase by up to 5%

49%

7% 69%

not change

decrease by up to 5%

decrease by more than 5%

increase

Decrease

Remain the same

Source: Cavendish Maxwell Residential Survey

ÂŠ Cavendish Maxwell 2016 | www.cavendishmaxwell.com

Methodology •

•

Sale Prices and rents are derived from Property Monitor, a comprehensive real estate platform established in 2014 to provide real-time, market-wide access to transactions and trends. Working with agencies, banks, developers and corporate investors, it provides a deeper insight into real estate advisory, investment, and lending activities. The average sales price per sq. ft. is based on the Property Monitor Index that incorporates signed contracts, registered transactions, valuations & listings verified by Cavendish Maxwell valuation department. Cavendish Maxwell Residential Market Survey is a quarterly survey aimed at agents operating in UAE and is designed to identify sentiment of the residential market in the region. Forming a part

of the Quarterly Residential Market Report released by Cavendish Maxwell, the research showcases how new enquiries, leasing activity and transactions, among other metrics, changed over the previous quarter as per information from agents. The survey also provides an outlook on the following quarter, with predictions by key market players being studied against real performance. •

Supply projections for residential projects are based on regular tracking of construction status, new launches, delays, etc. This is carried out through site inspections as well as discussion with developers, contractors, in-house building consultancy team and related government entities.

Development Advisory and Real Estate Research Cavendish Maxwell’s advisory and research team uses its in-depth knowledge of the real estate sector and extensive network to support our clients through the development process, providing strategic consultancy and advice to guide and support investment decisions from concept to delivery.

Our documents and advice meet banking and audit criteria, proven by our presence on over 30 bank panels across the UAE

We have advised on schemes with a gross development value of over AED 3 billion in the last year. Our reports are used internally for business planning purposes and to satisfy the criteria of external financiers and auditors. Our name is trusted by all major banks across the UAE, supported by our presence on over 30 bank panels across the region.

Core services

Market Research

Due Diligence for Land Acquisition

Asset Management

Property Data

Buyer Profiling

Feasibility Studies

Highest & Best Use Studies

Joint Venture Structuring

Advisory Services

Site Analysis

Disclaimer Cavendish Maxwell and Property Monitor 2016. The information and analysis contained in this report has been obtained from or is based on information from a variety of sources generally regarded to be reliable and assumptions which are considered reasonable, and which was current at the time of undertaking market research. However, no representation is made, or responsibility

accepted by Cavendish Maxwell or Property Monitor, in respect of the accuracy or currency of this information. Cavendish Maxwell and Property Monitor do not accept any liability in negligence or otherwise for any loss or damage suffered by any party resulting from reliance on this publication.

PROPERTY SERVICES MIDDLE EAST & AFRICA Jay Grant MSc IRRV (Hons) Chairman M: +971 50 192 1658 E: jay.grant@cavendishmaxwell.com

Nigel Armstrong FMAAT Chief Executive Officer M: +44 7825 168 638 E: nigel.armstrong@cavendishmaxwell.com

Miles Phillips BSc (Hons) MRICS ACIArb Partner M: +971 56 604 2750 E: miles.phillips@cavendishmaxwell.com

Sofia Underabi MRICS AAPI Partner Head of Residential Valuation M: +971 50 435 6527 E: sofia.underabi@cavendishmaxwell.com

Amit Shukla Senior Associate Development Advisory and Real Estate Research M: +971 56 360 3540 E: amit.shukla@cavendishmaxwell.com

Manika Dhama BA (Hons), MBA Research Manager

M: +971 50 482 7938 E: manika.dhama@cavendishmaxwell.com

Also contact us for:

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Development Advisory and Real Estate Research

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