Q3 Market Report: Prices soften overall in the Dubai property industry
In the last few months, we have seen a whirlwind of announcements and updates from the UAE government, most of which have far-reaching implications on the Dubai real estate market. Although it’s still too early to tell how the newly announced laws retirement visa, company ownership and 10-year residency will impact the overall property market in Dubai over the course of the next year, we can anticipate a paradigm shift in the perception of property investments in the country. As we enter the final few months of 2018, it’s time to look at how the real estate market in Dubai has evolved in the last three months. The data engineers at Bayut have put their best foot forward to get you the real estate trends in the Dubai property market for Q3 of 2018.
In the Q3 real estate market report for Dubai, our data team has compared prices between those seen in Q2 of 2018, so you can see how they have transitioned in the three months since our Dubai H1 real estate market report was published.
Dubai Marina continues to rake in the searches for apartment rentals
Continuing the trend we saw throughout 2017 and 2018, Dubai Marina once again was the most searched for location when it comes to renting apartments in Dubai. the average price for studios, 1 and 2-bedroom flats decreased on average for this quarter at AED 55k, AED 81k and AED 120k respectively.
Another popular established neighbourhood is Al Nahda, where prices for studios and 1 BHK units went down to AED 35k and AED 44.1k respectively and 2-bedroom apartments remained at AED 60k.
The most budget-friendly flats in Dubai for Q3, 2018 are the apartments in International City, where prices on average came down with 2-bedroom flats showing the steepest decline of 8.33% at AED 55k.
The list of top 10 areas for renting apartments in the Dubai property market featured a healthy mix of ‘old’ and ‘new’ neighbourhoods. The other popular areas to rent flats in Dubai include Deira, Bur Dubai, Dubai Sports City, Dubai Silicon Oasis, Jumeirah Lake Towers, Jumeirah Village Circle and Business Bay.
Prices decline on average for buying apartments in the Dubai property market
The overall trend veered towards declining property prices for the apartments for sale in Dubai. That said, the percentage decrease in prices have remained under 10% for the most part, signalling that things could be bottoming out in the coming months.
The lifestyle capital of the city, Dubai Marina, took the top spot for those looking to invest in apartments, with prices on average remaining stable for studios and 2-bedroom apartments at AED 850k and AED 2M respectively. A marginal increase of 1% was seen for buying 1-bedroom apartments in Dubai Marina, which now average AED 1.12M.
The centre of now, Downtown Dubai and the budget-friendly International City were next on the list of top 10 areas to buy flats in Dubai. There was a noticeable decrease of 8.2% for buying studios in International City with prices coming down to AED 280k. All other price differences for buying flats in these top three areas in the Dubai real estate market were under 5%.
JLT, JVC, Dubai Silicon Oasis, Palm Jumeirah, Dubai Sports City, The Greens and JBR took the other coveted spots on the list of popular areas to buy apartments in Dubai.
International City gives investors the highest ROI for apartments in Dubai
Investors looking at buying properties in Dubai and renting it out for a high return on investment (ROI), should look at areas such as International City, Dubai Investment Park, Liwan, Discovery Gardens and Dubai Sports City. In this quarter, the highest ROI for buying apartments the Dubai real estate market is for International City, with a high 9.3% average rental yield. This is followed by the flats in Dubai Investment Park, with an ROI of 9%.
Mirdif retains top spot for renting villas in the Dubai real estate market
The spacious family villas in Mirdif remain popular with both expats and locals for renting houses in Dubai. In terms of prices, Mirdif looks rather stable, with prices for 3 and 5-bedroom homes remaining unchanged at AED 120k and AED 140k respectively. There has been a slight increase of 1.5% for 4-bedroom villas in Mirdif, with average rent prices of AED 132k.
Master developer Emaar’s ever-popular villas in Arabian Ranches and old-time favourite Jumeirah take the other top spots for renting villas in Dubai. Both areas have experienced a decrease in prices for 3 and 5-bedroom units, while prices for renting 4-bedroom houses in Arabian Ranches and Jumeirah have remained stable.
The most significant changes when it comes to the price of renting villas in Dubai this quarter have been for 3-bedroom villas in JVC (down by 10% to AED 135k), 5-bedroom villas in Al Barsha (down by 8.3% to AED 220k) and 4-bedroom villas in Jumeirah Park (up by 7.7% to AED 210k).
Other popular locations offering a wide selection of villas for rent in Dubai are The Springs, Al Barsha, Umm Suqeim, Palm Jumeirah, Dubailand and Jumeirah Park.
Arabian Ranches gets the lion’s share of searches for investments in Dubai Villas
It doesn’t look like the extremely well-planned community of Arabian Ranches will lose out on its top spot as the best place to buy villas in Dubai. The average price for buying 3 and 4-bedroom villas in Arabian Ranches have decreased by 5% to AED 2.85M and AED 3.8M, while 5-bedroom houses are stable at AED 4.9M.
The next spot is taken by the luxurious villas for sale on Palm Jumeirah, where average prices for 4-bedroom houses have dropped by nearly 5% to AED 10M, while 5-bedroom properties have gone up by a marginal 2.9% to AED 15.9M.
Price changes of over 5% were seen for 4-bedroom villas in Dubailand which went up by 6.4% to AED 2.5M and 4-bedroom houses in JVC which went down by 8% to AED 2.3M.
We can see a clear mix of both luxury and affordable properties when it comes to the other popular areas to buy villas in the Dubai property market this quarter, which includes The Springs, The Villa, DAMAC Hills, The Meadows, Al Barari and Reem.
Umm Suqeim has the highest ROI for villa sales in Dubai
When it comes to ROI for villas in Dubai, the high rental yields of close to 8% for houses in Umm Suqeim makes it a haven for investors. The next popular areas to invest Dubai’s ready property market for villas are The Views and Reem where ROI is around the 7% mark.
The Off-Plan Market Continues to be popular with property investors in Dubai
Property investors in Dubai have enjoyed a larger portfolio of options to choose thanks to the resurgence of the off-plan market since the last year. With more and more reputed builders such as Emaar, Dubai Properties, Meraas and Meydan coming up with attractive projects, the interest in high for the top off-plan properties in Dubai. The unbeatable payment plans combined with the increased regulations around off-plan properties in Dubai has also made the public more confident about investing in such projects. With the new laws coming into effect, we could see more first-time homeowners choosing to invest in off-plan projects in Dubai and fortify their investments in the city.
Popular areas for off-plan developments in Dubai include Mohammed Bin Rashid City, Akoya Oxygen, JVC, Downtown Dubai and JLT. Within MBR City, District 7 the behemoth project by Meydan is the most popular. Located close to the upscale Meydan Hotel and providing easy access to other hotspots in the city, it’s easy to see why investors are flocking to this development. Sahara Villas in Akoya Oxygen, Orchidea Residence in JVC, Opera District in Downtown Dubai and Wind Towers in JLT are some of the other notable off-plan communities to invest in Dubai.
Forecast for the next quarter
Haider Ali Khan, CEO of Bayut, said: “The average fall in property prices for this quarter is in line with the trends we saw in the H1 Market Report. It’s definitely still a buyers and renters market, but modest decreases in price suggest potential bottoming-out across the emirate. With the recent announcement of the new retirement visa along with earlier plans for the 10-year residency visa and 100% foreign company ownership coming into effect by the end of the year, we could see sales picking up in 2019.
The time is perfect for people to invest and become homeowners or upgrade to bigger rental properties in Dubai and benefit from decreased prices floating in the market at the moment.”
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 the Dubai property market.
