Dubai property market report for Q3 2019: Luxury and suburban areas gain traction with investors

As we begin to approach the end of 2019, we return with the quarterly analysis of property prices in Dubai. To do so, our report compares the sales and rental prices for popular areas in Q3 2019 to those seen in Q2 2019. 

For a more accurate representation of price changes, the report compares the average price per square foot for an area when analysing sales trends for apartments and villas in Dubai. These prices are subject to change based on the developer, amenities, location of the property and other factors. For instance, the area of Palm Jumeirah has an average price per square foot of AED 2,201, however, the ultra-luxurious XXII Carat Villas have a price per square foot of AED 4,481, due to its prime location, high-end finishing and services. 

For rental properties, this Dubai real estate report compares the average cost for individual unit types between the two quarters in popular areas of the emirate. 

In Q3 2019, property trends in Dubai reveal that luxury and suburban areas are gaining traction with investors. Areas such as Palm Jumeirah, Dubai Marina, Jumeirah Village Circle, Downtown Dubai and Dubailand have attracted the most attention from investors. In the rental market, tenants are taking advantage of affordable prices to upgrade to larger units or move to more upscale locations. Established neighbourhoods like Al Nahda, Dubai Marina, Mirdif and Jumeirah are the most sought-after by renters in the city. 

Dubai continues to attract investors and renters with a wide portfolio of properties, high ROI and good infrastructure. The value of real estate transactions in 2019 has risen by 12% while the contribution of the real estate sector to the GDP has increased each year, according to the Dubai Land Department (DLD). The efforts of Dubai to establish itself as a leading financial centre and foster a world-class business environment has encouraged people from across the globe to put down their roots here, and consequently, invest in the emirate’s property market. 

Read on for an in-depth report of the performance of the real estate market and the evolution of property prices in Dubai in the third quarter of 2019. 

DUBAI MARINA IS THE MOST POPULAR AREA TO BUY APARTMENTS IN DUBAI

TOP 10 AREAS TO INVEST IN APARTMENTS IN DUBAI

Continuing the trend from the beginning of 2019, Dubai Marina remains the favourite with potential investors interested in buying apartments in Dubai. This upscale neighbourhood has only experienced a minor decrease in the average price per square foot over the last quarter, with prices declining by 3.9% from AED 1,301 to AED 1,250. However, Bayut’s data on property prices in Dubai reveal that the average cost for apartments in Dubai Marina for sale have remained stable, standing at AED 700k and AED 1.1M for studios and 1-bedroom apartments respectively. Meanwhile, 2-bedroom flats in Dubai Marina have seen the average cost for sales dip slightly from AED 1.8M to AED 1.7M. This could be due to the recent handovers of more expensive units in Dubai Marina such as Marina Gate II, with bigger square footage and high-end amenities.

In Q3 2019, the luxurious Palm Jumeirah community has emerged as the second-most popular area with apartments for sale in Dubai. The property price trends in Dubai reveal that Palm Jumeirah experienced a decline in price per square foot for apartments on sale, dropping by 8.06%. The sales price per square foot for apartments for sale in Palm Jumeirah averages at AED 1,311 in Q3 2019, down from AED 1,426.

The decline suggests that investors are taking advantage of favourable market conditions to negotiate better deals in historically-expensive areas. The average sales cost for 1-bedroom flats and 2-bedroom apartments in Palm Jumeirah has also dropped over the last quarter, standing at AED 1.79M and AED 2.5M respectively. However, the average sales cost for studios in Palm Jumeirah has risen from AED 1.15M to AED 1.19M, which could indicate an influx of larger studio units in the area.

Other areas in the Dubai property market that have attracted investor attention for buying apartments are Downtown Dubai, Jumeirah Village Circle (JVC), Dubai Sports City, Jumeirah Lake Towers (JLT), Dubai Silicon Oasis, Business Bay and Jumeirah Beach Residence.

Overall, Dubai real estate trends suggest that these areas have seen the average price per square foot decline between 2% – 6%. Popular areas for buying apartments such as Downtown Dubai and JVC have shown consistent demand, evidenced by minor price per square foot decreases between 1% – 3%. On the other hand, the affordable location of International City has seen an uptick in price per square foot by 0.83%, rising from AED 481 to AED 485 in Q3 2019, suggesting demand for cost-effective properties.

APARTMENTS IN INTERNATIONAL CITY OFFER THE BEST ROI FOR INVESTORS

The International City community continues to boast the best rental returns in Dubai, with an impressive ROI of 9.4%, according to trends for property prices in Dubai. Other residential communities that deliver high ROI are Jumeirah Lake Towers and Dubai Sports City, which offer rental returns of 8%. However, bear in mind that the ROI mentioned is an average for the area, and can vary depending on the property type.

AL NAHDA TAKES THE LEAD FOR RENTING APARTMENTS IN DUBAI

TOP 10 AREAS TO RENT APARTMENTS IN DUBAI

In Q3 2019, Dubai property trends indicate a perceivable interest in established areas by potential tenants. Neighbourhoods like Al Nahda, Dubai Marina, Bur Dubai and Deira take the lead for rental apartments in Dubai over the last quarter.

The older area of Al Nahda ranks as the most popular with those searching for apartments for rent in Dubai. The Al Nahda community has long been favoured by tenants for its affordability, family-friendly amenities and convenient location between Dubai and Sharjah. Apartments in Al Nahda have seen minor decreases across the board, with rental costs falling between 4% – 6%. Rental studios in Al Nahda now average at AED 31k, while 1-bedroom flats and 2-BHK apartments stand at AED 38k and AED 50k respectively.

Dubai Marina is another one of the sought-after areas in the Dubai real estate market, coming in a close second for renting apartments. Dubai property price trends indicate that rentals for Dubai Marina have remained steady, with only 1-bedroom apartments experiencing a decrease by 3.8% in rents. The 1-bedroom flats in Dubai Marina average at AED 75k, while studios stand at AED 50k and 2-BHK flats are at AED 110k.

Other areas of note in the real estate market in Dubai are JVC, International City, Dubai Sports City, Dubai Silicon Oasis and JLT. The most significant decline in rentals has been for 1-bedroom units in JVC, which have fallen by 7.4% to AED 50k in Q3 2019. All other decreases in rental costs have been between 2% – 7%.

Trends for property prices in Dubai show that JVC, International City and Deira have also seen stability for larger apartments. Deira, in particular, has seen rental costs remain steady for studios and 1-bedroom units, while 2-bedroom apartments have seen a 2.1% uptick in rentals, averaging at AED 72k. One of the oldest neighbourhoods in Dubai, Deira is undergoing an enrichment programme, with new residential units, hotels, parks, retail spaces and other amenities being developed in the area.

PALM JUMEIRAH REMAINS THE TOP AREA FOR VILLAS FOR SALE IN DUBAI

TOP 10 AREAS TO BUY HOUSES IN DUBAI 

POPULAR AREAS	ROI	PRICE PER SQ.FT Avg. Price/sq.ftChange from Q2 2019	3 BED VILLA	4 BED VILLA	5 BED VILLA
Palm Jumeirah	ROI 3.4%	PRICE PER SQ.FT Avg. Price/sq.ftChange from Q2 2019 2,201 -6.66	3 BED VILLA 6,099,500	4 BED VILLA 9,120,000	5 BED VILLA 18,000,000
Arabian Ranches	ROI 5.9% Subscribe to Subscribe	PRICE PER SQ.FT Avg. Price/sq.ftChange from Q2 2019 886 -0.67	3 BED VILLA 2,374,950	4 BED VILLA 3,750,000	5 BED VILLA 4,325,000
Dubailand	ROI 5.5%	PRICE PER SQ.FT Avg. Price/sq.ftChange from Q2 2019 649 -0.15	3 BED VILLA 1,390,000	4 BED VILLA 2,300,000	5 BED VILLA 3,000,000
DAMAC Hills (Akoya by DAMAC)	ROI 4.6%	PRICE PER SQ.FT Avg. Price/sq.ftChange from Q2 2019 948 -4.34	3 BED VILLA 2,475,000	4 BED VILLA 3,100,000	5 BED VILLA 4,411,000
The Villa	ROI 4.9%	PRICE PER SQ.FT Avg. Price/sq.ftChange from Q2 2019 686 -4.46	3 BED VILLA 1,229,000	4 BED VILLA 2,999,999	5 BED VILLA 3,900,000
The Springs	ROI 6.5%	PRICE PER SQ.FT Avg. Price/sq.ftChange from Q2 2019 834 -3.36	3 BED VILLA 2,150,000	4 BED VILLA 2,875,000	5 BED VILLA N/A
Umm Suqeim	ROI 4.4%	PRICE PER SQ.FT Avg. Price/sq.ftChange from Q2 2019 926 -3.54	3 BED VILLA 2,395,000	4 BED VILLA 2,500,000	5 BED VILLA 4,422,000
Mudon	ROI 6.1%	PRICE PER SQ.FT Avg. Price/sq.ftChange from Q2 2019 744 -1.72	3 BED VILLA 1,525,000	4 BED VILLA 2,350,000	5 BED VILLA 3,937,500
Jumeirah Village Circle (JVC)	ROI 6.8%	PRICE PER SQ.FT Avg. Price/sq.ftChange from Q2 2019 565 -3.75	3 BED VILLA 1,825,000	4 BED VILLA 1,900,000	5 BED VILLA 2,497,500
Emirates Hills	ROI 2.9%	PRICE PER SQ.FT Avg. Price/sq.ftChange from Q2 2019 N/A: Emirates Hills has 6-beds and larger units. Refer to the writeup for more info.
Not available due to low/no historical inventory or influx of off-plan properties

The iconic development of Palm Jumeirah continues to be the most popular with investors for buying villas in the Dubai property market. Similar to apartment sales, Palm Jumeirah also experienced a decline in average sales price per square foot for villas, dropping by 6.6% from AED 2,358 to AED 2,201. Such moderate declines make the luxury property market in Dubai more accessible and lucrative for potential investors. The average sales cost for 4-bedroom villas in Palm Jumeirah has dropped from AED 9.8M to AED 9.12M, while 5-bed villas currently average at AED 18M, which is slightly lower than the AED 18.5M average prices seen in Q2 of 2019. The 3-bedroom villas in Palm Jumeirah have remained fairly stable at AED 6.09M, as per trends for property prices in Dubai.

The family-friendly and established Arabian Ranches community is also among the favourites for villa sales in Dubai. Real estate trends in Dubai reveal that demand for villas in Arabian Ranches has remained steady, as noted by the minor decrease in price per square foot by 0.67%. Arabian Ranches villas for sale now have an average price per square of AED 886, down from AED 892, although this can vary depending on the sub-community. As a result, 5-bedroom villas in Arabian Ranches have seen average sales cost dip from AED 4.59M to AED 4.32M in Q3 2019. On the other hand, the average cost has risen slightly for 3-bed villas in Arabian Ranches to AED 2.37M, and for 4-bed villas to AED 3.75M.

Popular areas in the Dubai real estate market for buying villas also include Dubailand, DAMAC Hills (Akoya by DAMAC), The Villa, Mudon and The Springs. Bayut’s data indicates that the most decreases in average price per square foot have been between 2% – 6%. Suburban areas such as Dubailand and Mudon are also drawing attention from investors, with only slight decreases in price per square foot of up to 2%.

Another area that has become popular to invest in villas in Dubai over the last quarter is the non-freehold location of Umm Suqeim, which suggests increased interest by UAE and GCC investors. This coincides with DLD’s findings that Emirati individual investors had the highest value of real estate investments in 2018.

The exclusive and ultra-luxurious Emirates Hills community is also amongst the most-searched-for areas for villas on sale, with price per square foot averaging at AED 1,829. Potential investors are most interested in 6-bedroom villas for sale in Emirates Hills, for which the average cost is AED 31M. This is followed by 5-bedroom and 7-bedroom villas in Emirates Hills, which have average costs of AED 24M and AED 33.5M respectively.

JUMEIRAH VILLAGE CIRCLE HAS THE BEST RENTAL YIELD IN DUBAI FOR VILLAS

Investors looking for villas with the best ROI in Dubai should consider the community of Jumeirah Village Circle (JVC), which delivers rental returns of 6.8%. Areas such as The Springs, Mudon and Arabian Ranches also offer great rental yields of 6% for buying villas in Dubai. The emerging area of Dubailand is also ideal for investors keen on purchasing buy-to-let villas, with an average ROI of 5.5%.

Please note that these figures are the overall ROI for an area, and can vary depending on the sub-community and property type.

POTENTIAL RENTERS TURN TO MIRDIF TO RENT VILLAS IN DUBAI

TOP 10 AREAS WITH VILLAS FOR RENT IN DUBAI

Similar to apartment rentals, Bayut’s Dubai property market analysis reveals that tenants are favouring older, established neighbourhoods for villas in Q3 2019. Mirdif, which is known for its family-friendly, suburban lifestyle, remains a good option for renting villas in Dubai. Rentals for villas in Mirdif have only witnessed a moderate drop by 4.5% for 3-bedroom villas from AED 110k to AED 105k. Meanwhile, 4-bedroom units and 5-bedroom villas in Mirdif average at AED 125k and AED 130k.

In Q3 2019, Jumeirah has received increased interest from potential renters, moving past Arabian Ranches to become the second-most popular area with villas for rent in Dubai. The area has also seen the most notable decline in rental costs, an opportunity that more residents could be using to move to this sought-after location, which boasts eclectic cafes, schools and attractions. According to property price trends in Dubai, 3-bedroom villas in Jumeirah have dropped from AED 165k to AED 155k in Q3 2019, while 4-bed villas have fallen from AED 185k to AED 180k. On the other hand, the average cost to rent 5-bedroom villas in Jumeirah has remained steady at AED 220k.

Al Barsha, Arabian Ranches, Umm Suqeim, The Springs and The Villa are other areas in the property market in Dubai that renters are paying attention to for villa rentals. Most decreases in the rental costs for villas in these areas have been between 2% – 5%. Property prices in Dubai show that Reem has seen the biggest increase, with 3-bedroom villas rising from AED 105k to AED 112k. However, the units in Reem are still much more affordable than those seen in Arabian Ranches, Mudon or Mira. Other newer areas such as The Villa and DAMAC Hills will experience some amount of fluctuation as more units are being handed over.

TOP 10 OFF-PLAN PROJECTS IN DUBAI

Those looking to invest in off-plan properties in Dubai will have a variety of projects and property types to choose from. Recent initiatives by the Dubai Government to ensure a balance between supply and demand in the real estate sector also make it an ideal time to invest in off-plan projects in Dubai.

Property trends in Dubai reveal a strong interest in off-plan projects close to the Expo 2020 site, such as Dubai South, JVC, Dubai Hills Estate and Akoya Oxygen. In Dubai South, the upcoming community of Emaar South is most popular with potential investors, offering apartments, villas and townhouses for sale. The popular Expo Golf Villas on sale have a starting sales cost of AED 899k.

Luxury areas like Palm Jumeirah, Mohammed Bin Rashid City (MBR City) and Downtown Dubai also offer attractive payment plans and are a good choice for investors who want to make off-plan investments in Dubai. In Palm Jumeirah, the luxury apartments in One at Palm Jumeirah are sought-after by high-profile investors, with starting sales cost of AED 12.4M. Emaar’s new development, Dubai Hills Estate is another popular option for off-plan projects that promise a great lifestyle and good return on investment.

Please note that while the projects mentioned do have off-plan properties, they may have phases that have been completed and handed over. 

Haider Ali Khan, CEO of Bayut, commented on the performance on the Dubai real estate market: 

“As we’re approaching the end of 2019, Dubai’s property sector shows sustained growth, with its contribution to the GDP increasing year-on-year according to data released by DLD. Real estate transactions reached AED 106 billion in the first five months of 2019, growing by 12% from the same period in 2018. We have also observed record-breaking traffic on Bayut with the total views exceeding 88.5 million in the first half of 2019. This points to a steady interest from home buyers/investors in the Dubai property market.

“We’re also seeing the Dubai Government take proactive steps to safeguard the interests of investors and tenants and put forward policies to ensure value and competitiveness in the real estate sector. Off-plan sales are also on the rise; Dubai Land Department registered over 2,200 deals in July alone, which was incidentally one of the highest numbers we have seen since December 2017. A similar pattern of a correspondingly high number of views for off-plan properties was observed on Bayut in the same period. There were close to one million views for off-plan projects in July alone, which further reinforces the popularity of the off-plan market with buyers and investors. Our data shows sales interest is also picking up in suburban neighbourhoods such as MBR City, JVC, Dubai Silicon Oasis and Dubai Sports City. All of these contributing factors, combined with attractive prices and payment plans, are creating healthy market conditions for potential home buyers/investors looking to capitalise on the high rental returns Dubai is known to offer.”

And that concludes Bayut’s Q3 2019 report on property prices in Dubai. We hope this Dubai real estate market report 2019 will help you make informed decisions when renting or investing in property in Dubai. Keep following MyBayut for in-depth reports on the Abu Dhabi, Sharjah and Ajman real estate markets. 

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.