Is Off-plan sales driving down Dubai’s residential property prices ?

Residential property transactions in Dubai are rising, but the price trajectory remains unclear as developers selling off-plan units drive down prices in the affordable housing sector and create a stock of low-quality residential units in the emirate , brokers said on Tuesday.

The number of deals for built units since the beginning of this year has increased by 7 per cent year-on-year, while off plan sales jumped 62 per cent, according to Core Savills.

“As we enter the final quarter of 2017, a year in which most market players expected the Dubai residential market [prices] to bottom out, there remains a clear lack of direction,” said the broker. “Despite higher year-on-year transaction volumes, uncertainty and concerns of oversupply have produced divergent sale price trends and further market fragmentation between performing and non-performing communities.”

The market fragmentation is being exacerbated by developers who are behind a big chunk of off-plan new stock in the mid-market segment and are attracting investors, particularly, to the below Dh1 million price point, the broker said. Link