Dubai Q1 Market Report 2018: Property Prices, Off-Plan Developments and More

At Bayut.com, we have unparalleled access and insight into the UAE property market. Thanks to our data analytics team, we are able not only to monitor market trends in terms of property prices in Dubai using the listings on our website, but also track user behaviour when interacting with these listings – from popular areas that are being searched, down to the buildings or sub-communities that are drawing attention. This report focuses on how the Dubai property market fared in the first quarter of 2018, compared to the previous three months, when it comes to the renting, buying and selling of Dubai apartments and villas.

Dubai rents see an almost uniform decline across apartments and villas

Those looking to rent apartments in Dubai in the first quarter of 2018 experienced the average annual rent drop across almost every one of the ten most searched for neighbourhoods on Bayut.com.

The apartments in Dubai Marina commanded the highest average annual rent with studios listed for AED 62k per year and 1-beds for AED 87k per year – a 3.3% increase and decrease, respectively. The average annual rent for 2-beds stayed the same as it did in the final three months of 2017 however, at AED 130k per year.

The most budget-friendly flats in Q1 2018 are the apartments in International City, where prices remained stable for 1 and 2-bedroom apartments (at AED 40k and AED 60k, respectively) and the average annual rent for a studio declined by 3.33% to AED 29k

Another affordable and established neighbourhood is Al Nahda, where studios remained at a consistent AED 38k per year in Q1 2018, compared to Q4 2017. However, those looking for 1-bedroom apartments in Al Nahda saw prices drop slightly by 3.4% to AED 48.3k per year. Interestingly, the average annual rent of 2-beds rose by 3.17% to just under AED 65k per year.

The list of most-searched-for areas by apartment renters featured a healthy mix of both ‘old’ and ‘new’ Dubai neighbourhoods, with the likes of Dubai Silicon Oasis, Jumeirah Village Circle, Jumeirah Lake Towers and Sports City being joined on the list by the likes of Al Nahda, Deira, Bur Dubai and Al Qusais. The declining prices for properties in Dubai suggest that landlords are keeping things extremely competitive to attract the renters in the city.

Meanwhile, families who are drawn to spacious, private homes were once again most interested in the villas in Mirdif, the family-friendly, quiet, suburban neighbourhood that does not look like it’s losing popularity anytime soon. Tenants are also sure to have been buoyed by the fact that rents here have dropped by 5% and 10% for 4 and 5-beds, respectively, while the average annual rent of a 3-bedroom villa has stayed the same at AED 115k.

The price for villas on rent in Jumeirah, one of the city’s oldest villa communities, also dropped marginally across all segments, with 3-bedroom villas at AED 175k, 4-bedroom houses at AED 220k and 5-bedrooms at AED 277k. The most upscale properties to rent in Dubai are the villas in Palm Jumeirah, where 4-beds averaged at AED 380k and 5-beds at AED 390k. The only notable locality where prices increased on average are the villas in Umm Suqeim. The asking rent for 3-bedroom villas went up by 8.1% to AED 200k, 4-beds by 10% to AED 220k, and 5-beds by a substantial 14% to AED 285k.

Other popular locations with a wide selection of villas for rent in Dubai are The Springs, Arabian Ranches, Al Barsha, Dubailand, Jumeirah Park and The Meadows.

Dubai Marina Retains the Top Spot to Buy Apartments in the Dubai Property Market

The trend for declining property prices continued with apartments for sale in Dubai. The lifestyle centre of the city, Dubai Marina, took the top spot for those looking to invest in apartments, with prices on average going down for 1 and 2-bedroom apartments at AED 1.25M and AED 2.1M respectively. There was, however, an increase of 6.8% for studios in Dubai Marina at AED 854k.

The second most popular area to invest in apartments in Dubai is the cost-effective neighbourhood of International City, where studios averaged at AED 320k, 1 BHK units at AED 430k and 2BHK units at AED 735k. Similar to the trend with apartments on rent in Dubai, the most high-end flats can be found in Palm Jumeirah.  The asking prices are once again on the decline with studios averaging at AED 1.15M, 1 beds at AED 2.25M and 2 beds at AED 2.67M.

The apartments in New Dubai are certainly the most popular with real estate investors in Dubai, with JLT, JVC, Downtown Dubai, Business Bay, Dubai Sports City,  Dubai Silicon Oasis and JBR  taking the other coveted spots on the list of popular areas to buy apartments in Dubai.

When it comes to buying villas in Dubai, the favourite area to invest was the ever-popular Arabian Ranches. A frequent presence on ‘best villa communities in Dubai‘ lists, this family-friendly residential community by Emaar is known for its large spacious homes set in verdant surroundings. Those looking to invest here will the happy to note that prices on average have come down for the 4 and 5-bedroom villas for sale in Arabian Ranches. The 4-beds average at AED 4.15M and the 5-beds at AED 5.2M; and the 3-beds are at a stable AED 3.1M.

The second most popular option is the luxury villas for sale in Palm Jumeirah, where prices follow the overall trend across the Dubai real estate market, with the exception of 5-bedroom villas which have gone up by 3.4% to AED 15M. The other two villa configurations have reduced marginally since 2017 with  3 -beds going for AED 8.15M and 4-beds for AED 10.5M.

The most lucrative area for property investments in Dubai is predictably Dubailand, followed closely by the villas in JVC. New Dubai appears to be the flavour of the season for those investing in villas in Dubai with The Springs, The Villa, The Meadows, Jumeirah Islands, JVT and Jumeirah Park taking the other places on the coveted list.

The ROI for both apartments and villas remained mostly stable in the first quarter of 2018, which suggests that demand is still high for renting in the city. Rental yields were predictably higher for apartments at 6.5% compared to villas which were at 5.3%.

Off-Plan Surge Continues Strongly In the Dubai Real Estate Market

The renewed interest in off-plan properties that we saw from the second half of 2017, continues into the first quarter of 2018. The off-plan developments in Dubailand are one of the most popular investment options in Dubai; with particular interest for the properties in Villanova. The competitive price tag of these projects is definitely something that entices the investors, and with reputed builders like Emaar, Azizi and Omniyat announcing their involvement, off-plan developments in Dubai have certainly seen a resurgence.

Mohammed Bin Zayed City’s Sobha Hartland, JVC’s Green Valley Towers, Palm Jumeirah’s Mina By Azizi and Akoya’s Just Cavalli villas have constantly been in the news and appear to be progressing on schedule.

This interest in off-plan projects is definitely a positive sign as it suggests the longevity of investment interest in the real estate market in Dubai. While landlords will probably need to be more competitive with property prices in Dubai, investors have a larger portfolio of options to choose from. When the impact of VAT settles down across the economy, we can expect to see some stabilisation in the property market in Dubai.

Don’t forget to check out the best Dubai property blog to find out the latest trends in the Dubai market and stay up to date with all the news and information. If you have any queries about how the market fared in the first quarter of 2018, don’t hesitate to leave your questions in the comments section. We would be happy to help you out.

Disclaimer: The above report is based on prices advertised by real estate agencies on behalf of their clients on Bayut.com, and not representative of actual real estate transactions conducted in Dubai.