Dubai real estate market report for Q1 2020: Promising signs of stability in the Dubai property market for the first quarter

• Apartment sales
• Apartment rentals
• Villa sales
• Villa rentals
• Top off-plan projects

As we move into the second quarter of the year, it’s time to analyse how property prices in Dubai have fared in the first three months of the year compared to the last three months of 2019.

Based on the latest figures analysed by our data experts, the Dubai real estate market is showing promising signs of stability in the first three months of 2020. Property prices for the Q1 Dubai Market Report in 2020 for most of the popular areas in the emirate are more or less steady or even slightly higher in Q1 2020, compared to the prices in Q4 2019.

While the ongoing pandemic may lead to some predictable fluctuations in the market in the coming months, the overall property price trends in Dubai for the first three months of 2020 are in line with the patterns observed throughout the last year. Demand is high among tenants for well-integrated affordable communities, while investors and potential homeowners are keen on upscale neighbourhoods with family-friendly amenities.

Let’s take a closer look at the Dubai Quarterly Market Report for 2020 to see how prices have evolved in the first three months of the year.

PROPERTY TRANSACTIONS ACCORDING TO DLD IN THE MOST SEARCHED NEIGHBOURHOODS OF DUBAI ON BAYUT

Just as property prices in Dubai for the first quarter of 2020 are showing positive signs of stability, buyers and investors are also showing an increased interest in purchasing units in Dubai’s property market. This is apparent based on the Dubai Land Department’s (DLD) latest transactional data gathered from the REST app, which recorded a total of 10,272 real estate transactions in the first quarter of 2020 amounting to a value of AED 20.86B. This is a substantial increase compared to the 8,021 transactions carried out in the last quarter of 2019, worth AED 15.94B.

When analysing search trends on Bayut for Dubai property sales, the consistently in-demand locations such as Dubai Marina, Jumeirah Village Circle (JVC), Downtown Dubai and Palm Jumeirah made it to the list of top 10 most searched areas.

According to DLD’s REST app, Dubai Marina and JVC were some of the popular areas which recorded transactions worth AED 2.28B and AED 991.83M, respectively in the first quarter of the year. In most of these popular areas including Dubai Marina, JVC, Palm Jumeirah, Dubailand, JLT and Dubai Silicon Oasis, the volume of transactions have increased in 2020 compared to the last few months of 2019. This points to a healthy interest in the market from potential homeowners.

Now that we have an idea of how property transactions were conducted during the first quarter, let’s take a look at the average property price in Dubai and how they have performed in Q1 of 2020.

DUBAI MARINA COMES TOP FOR APARTMENT SALES IN DUBAI

DUBAI PROPERTY PRICES FOR BUYING FLATS

The famous waterfront development of Dubai Marina remains the most searched area by potential buyers interested in the apartments for sale in Dubai. In terms of property prices in Dubai, the neighbourhood is known for being one of the upscale locations, providing modern apartments for sale. The price per square foot to buy apartments in Dubai Marina has largely remained unchanged at AED 1,260. The overall average apartment price in Dubai Maria command an average of AED 661k for studios, AED 1.07M for 1-bedroom apartments and AED 1.72M for 2-bedroom apartments. 

The next popular area to buy flats in Dubai is one of the emirate’s newer communities, JVC. Known for its affordability, proximity to schools such as the JSS International School and other family-friendly facilities, JVC has become popular with expat residents across the emirate. The average price per square foot in terms of the apartments for sale in JVC remains competitive in the first quarter, decreasing by 4.2% from AED 802 in the last quarter of 2019 to AED 768k in the first quarter of 2020.  Prospective buyers can now expect the cost of studios in JVC to average at AED 410k going down from AED 414k in Q4 2019. The cost for purchasing 1-bedroom JVC apartments now average at AED 642k, dropping slightly from the AED 661k average of Q4 2019. As for the 2-bedroom units, the average sales price had gone from AED 1.03M in 2019 to AED 991k now. Since this is an area which has regular handovers, prospective buyers are exposed to a wider portfolio of new properties, helping them to negotiate further with sellers. Ellington Properties’ Eaton Place and Aurora Real Estate Development’s Hyati Avenue were some of the recently handed over properties in the area.

Other popular areas with flats for sale in Dubai include Downtown Dubai, Jumeirah Lake Towers (JLT), Dubai Silicon Oasis, Palm Jumeirah, Business Bay, International City, Jumeirah Beach Residence (JBR) and Liwan. Business Bay, JVC and International City had marginal declines in the price per square foot in Q1 2020 of under 5%. Dubai real estate prices on average have remained largely unchanged across the other sought-after areas and even increased in popular localities such as Downtown Dubai and JLT, pointing to further recovery in the market.

INTERNATIONAL CITY HAS THE BEST RENTAL YIELD IN DUBAI FOR APARTMENTS

International City has consistently offered the best rental returns in Dubai for investors, with a projected ROI of over 9%. Dubai Silicon Oasis and JLT  also offer an impressive average ROI of 8% according to trends for property prices in Dubai. 

Now, let’s take a look at the property prices in Dubai for renting apartments.

JVC IS THE FIRM FAVOURITE FOR RENTING FLATS IN THE DUBAI REAL ESTATE MARKET

RENTS IN DUBAI FOR APARTMENTS

JVC is the favoured choice for tenants looking at flats for rent in Dubai. Property prices here reduced marginally between 2% to 4% with studios in JVC averaging at AED 34k, 1-bedroom apartments for rent in JVC going from AED 50k in Q4 2019 to AED 48k in Q1 of 2020 and 2 BHK units averaging at AED 70k.

Coming in second is the budget-friendly and bustling neighbourhood of Bur Dubai, which was one of the few places with prices increasing on average for 2-bedroom units by 2% to AED 73k. The rents for studios in Bur Dubai averaged at a competitive price of AED 37k while 1 BHK units are going for AED 54k.

Consistent favourites Al Nahda and Dubai Marina are also displaying positive signs of stability. Average rents in Al Nahda for studios are at AED 31k, 1-beds are at AED38k and 2 BHKs are at AED 50k. Rents in Dubai Marina are recovering for studios with prices going up by 5.1% to AED 51k on average. This recovery is also mirrored for 2-bedroom units now average at AED 110k, an increase of 0.9% from Q4 2019. The 1-bedroom apartments for rent in Dubai Marina have held steady with prices averaging at AED 75k.

Deira, Dubai Silicon Oasis, Dubailand, Business Bay, International City and Downtown Dubai are also making their mark in the list of top ten most popular areas to rent apartments in Dubai. The trend for property prices in Dubai’s popular areas for renting flats also showed signs of bottoming out in Q1 Market Report for 2020, echoing the overall trend in the market.

THE VILLA IS THE PREFERRED CHOICE FOR BUYING HOUSES IN DUBAI

DUBAI PROPERTY PRICES FOR BUYING VILLAS

As per our report on Dubai property prices for Q1 2020, The Villa has secured the top spot with prospective buyers interested in purchasing houses in the emirate, beating the usual favourites Arabian Ranches and Palm Jumeirah to the second and third position.

The price per square foot in The Villa has remained unchanged, averaging at AED 669. The cost for individual houses for sale in The Villa is also unaffected, averaging at AED 2.85M for 3-beds, 3.28M for 4-bedroom houses and AED 3.79M for 5-bedroom units.

Arabian Ranches is the second-most popular area with villas for sale in Dubai. The average price per square foot here has seen a minor increase of 2.5% in Q1 of 2020, averaging at AED 903, up from AED 881 in Q4 of 2019. Buyers can now expect the cost of 3-bedroom villas in Arabian Ranches to average at AED 2.25M. The cost for purchasing 4-bedroom Arabian Ranches villas now average at AED 3.7M, increasing slightly from the AED 3.64M average of 2019. As for the 5-bedroom units, the average sales cost went from AED 4.48M in 2019 to AED 4.67M now.

The sales price for homes in Dubai’s exclusive Emirates Hills community is averaging at AED 1,701 per square foot. Potential investors are most interested in 6-bedroom villas for sale in Emirates Hills, for which the average cost is AED 28.1M. This is followed by 7-bedroom and 5-bedroom villas in Emirates Hills, which have average costs of AED 39.1M and AED 20.3M respectively.

Other popular areas for buying villas in the Dubai real estate market include Palm Jumeirah, Dubailand, The Springs, DAMAC Hills (Akoya by DAMAC), Dubai Hills Estate, JVC, Emirates Hills and Jumeirah Park. The price per square foot for buying in these popular locations, increased between 1 – 5% in the first three months of 2020, compared to the last three months of 2019. Palm Jumeirah is the only area that experienced an increase of 5.3% from AED 2,095 in Q4 2019 to AED 2,206 in Q1 2019.

JVC AND THE SPRINGS HAVE THE HIGHEST RENTAL RETURNS IN DUBAI FOR VILLAS

According to the trends of property prices in Dubai, JVC once again offers the best ROI in Dubai at 6.5% for those looking to purchase villas in Dubai. This is followed by The Springs which offers rental returns of 6.2%. Another area from the Dubai property market that has a good return on buy-to-let villas is Arabian Ranches, which offers an ROI of 5.6%.

MIRDIF PRESERVES ITS POSITION ON TOP FOR RENTING VILLAS IN DUBAI

PROPERTY PRICES IN DUBAI FOR VILLA RENTALS IN DUBAI 

In Q1 2020, Mirdif still holds the title of the most desired neighbourhood for tenants looking to rent villas in Dubai. Trends for property prices in Dubai’s beloved villa community also indicates stability. Rents for 3-bedroom villas in Mirdif experienced a minor drop of 5.8% from AED 103k in Q4 2019 to AED 97k now. As for the rents for 4 and 5-bed villas, these units continue to average at AED 119k and AED 125k, respectively. 

The established beachfront community of Jumeirah is next on the list of top 10 areas to rent villas in Dubai. Rents in Jumeirah remain largely unchanged with 3 and 4-bedroom villas averaging at AED 157k and AED 180k respectively. Rents for 5-bedroom villas in Jumeirah increased by 3.5% from AED 226k previously to AED 234k now. 

Other popular areas to rent villas in Dubai include The Springs, Akoya Oxygen, Arabian Ranches, Al Barsha, Dubai Hills Estate, Umm Suqeim, Reem and JVC. The Dubai real estate market trends for average rents in these neighbourhoods remain competitive, experiencing minor declines between 2 – 7%. The most noticeable declines are at 9.9% for 4-bedroom villas for rent in Dubai Hills Estate where rents decreased from AED 151k in Q4 of 2019 to AED 136 now. This is, however, a recently handed over area, so fluctuations are fairly predictable. Rents for 4-bedroom houses in Reem also experienced a decline of 7.6% from AED 118k previously to AED 109k now, pointing to favourable negotiating environments for tenants. The presence of other reasonably priced communities in the vicinity, including DAMAC Hills and Town Square may also be helping tenants to negotiate better deals in this area.

OFF-PLAN PROJECTS IN THE DUBAI PROPERTY MARKET

TOP OFF-PLAN PROJECTS IN DUBAI FOR 2020

As per the DLD’s latest reports, 49.3% of the total sales transactions until 15 March 2020 were from the off-plan property market in Dubai. Those interested in investing in off-plan projects are keen on well-integrated, family-oriented communities such as Akoya Oxygen and Jumeirah Village Circle (JVC). 

Within Akoya Oxygen, the Albizia development which offers plots, luxury villas and townhouses, has attracted the most attention from potential buyers while the luxury off-plan apartments in Pantheon Elysee are the most searched for by prospective homeowners in JVC as per Bayut’s report.

Other off-plan projects gaining interest are Rukan in Dubailand and EMAAR South in the Dubai South district. These projects are close to the Expo 2020 site, offer competitive options for those who want to make property investments in Dubai.

Off-plan projects in Downtown Dubai, Dubai Hills Estate, Business Bay and Mohammad Bin Rashid City are also garnering interest from investors in Q1 2020.

Commenting on the trends, Bayut’s CEO Haider Ali Khan said:  

“Before this unfortunate global event impacted all of our lives, property prices across the emirate were showing encouraging signs of stabilising, based on Bayut’s data from the first quarter. We also noticed a surge in interest for residential property listings in Dubai with close to 15 million searches conducted in the first quarter. Similarly, there were also uplifting signs from a transactional perspective, with the DLD reporting well over 9,000 sales transactions from January to March 2020.

Although the first quarter shows some healthy numbers, we should be prepared to see some fluctuations in the coming months as the UAE continues to lead the region’s fight against COVID-19. While the government has been proactive by announcing stimulus packages to support the industry, we still need to wait and observe the impact on consumer interest in the following quarter. 

It is also vital that we all stay positive, support the government and come together as a community to successfully tide over this challenging time. At Bayut, we are working very closely with our partners in the industry, staying transparent with our communications and identifying opportunities to help the real estate fraternity come out of this difficult time stronger than before. As a part of this effort, we have launched our highly engaging and well attended weekly webinars, The State of Real Estate with Bayut, with leading experts from the real estate industry sharing their insights on productive ways to deal with the current situation. We have also expedited certain virtual solutions to help prospective buyers and tenants who are impacted by the social distancing guidelines, by launching the region’s first 3D Live visualisations of our exclusive floor plans. We have also started hosting guided property tours for our consumers on our website and app. 

I think there is a real opportunity for all of us to learn, innovate and build strong relationships with our users and partners during this period. It is up to us to look for the silver lining, make the most of these opportunities and come out stronger together.”

That wraps up our Q1 2020 Dubai real estate market report. Stay tuned to the Market Trends section of our blog for our property market analysis of Abu Dhabi, Sharjah and Ajman.

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.