It is a car aficionado’s dream community, but Dubai Motor City is just as popular among non-motoring enthusiasts judging by the number of families who have put down roots here. The clincher for these residents, according to property analysts, is a combination of price, size and amenities. “Several other factors drive the popularity and appeal of the area such as retail, shopping and restaurants along the main strip, which continues to expand,” said Zhann Jochinke, chief operating officer of Property Monitor. “Last year we saw the opening of First Avenue Mall, which has popular stores as anchor tenants. Additionally, there is a wide range of entertainment and leisure options like Kartdrome, Autodrome, etc. In addition to individual tenants and residents, there are large blocks of apartments and town houses owned by corporate entities and used as professional staff accommodation, such as teachers.”
Tenants will find attractive prices here this year, with Property Monitor reporting a 14.33 year-on-year decline in average rental prices. “The monthly rate of decline continues to follow this trend and we anticipate further declines in 2020, in line with the wider Dubai market,” said Jochinke. “Tenants may also find landlords willing to offer concessions and incentives such as multiple instalments and rent-free periods.”
Haider Tuaima, head of real estate research at ValuStrat, which reported an 89 per cent residential occupancy rate in Motor City, believes prices and rents will only see single-digit declines in the next two years. This will still result in significant savings for house-hunters as ValuStrat’s Price Index has already noted a 27 per cent decline in apartment capital values since their peak in mid-2014. Property Monitor’s research showed prices declined around 21 per cent for apartments and 28 per cent for villas and town houses in the same period.
According to John Stevens, managing director of Asteco Property Management, the competitive prices are “predominantly due to the sheer amount of units available for sale and lease, as well as the above-average size of the units, which previously achieved premiums due to the large balconies and terraces and/or additional maid, storage and study rooms”.
“While short-term new supply in Motor City is limited, the potential for long-term competition is significant due to the amount of vacant land,” Stevens added.
According to Asteco, apartment rents in the area currently range from Dh35,000-Dh45,000 for studios, Dh45,000-Dh65,000 for one-bedders, Dh65,000-Dh95,000 for two-bedders and Dh90,000-Dh130,000 for three-bedders. For villas, Asteco reports rents from Dh115,000-Dh150,000 for three-bedders, Dh180,000-Dh220,000 for four-bedders and Dh215,000-Dh260,000 for five-bedders.
For homebuyers, Motor City offers an opportunity to upgrade to larger units, according to Jochinke. “There is also interest witnessed from first-time buyers,” he added. Property Monitor has reported average villa and apartment prices of Dh835 and Dh701 per square foot respectively in Motor City. In the apartment segment, ValuStrat said capital values declined 10.7 per cent annually, with sellers last year achieving average prices of Dh495,647 for studios, Dh881,532 for one-bedders, over Dh1.28 million for two-bedders and over Dh1.55 million for three-bedders.
“The number of good deals in the market is significant, whether off-plan or in the secondary sales market,” said Stevens. “It is a good time to buy now if your investment horizon or requirement for self-use is medium to long term. There is a higher risk associated with the short-term investments as capital gains are unlikely given the projected supply.”
For investors, Property Monitor reports gross yields of 6.9 per cent for apartments and 5.17 per cent for villas. “Attractive purchase prices and yields would be the primary factors [attracting investors to Motor City],” said Jochinke.
Dubai residents who have stayed for the long haul during the past decade or more will have experienced both extremes of the rental market cycle.
Like any market, Dubai's property sector has had its ups and downs amid global economic fluctuations since 2008. As a result, long-term tenants may have found they were paying almost half the annual rent at some point in time compared with the earlier years.
Rental rates in 2008 were much higher than today with a rapidly expanding workforce and economy. But the global financial crisis sent rents tumbling in 2009, and they remained subdued until 2012 as some recovery emerged.
Dubai average apartment rental rates 2008-2019
Market confidence rose again in 2013, when Dubai won the bid to host Expo 2020 and they peaked in 2014 before a combination of low oil prices and a strong US dollar marked the beginnings of a correction.
There has been a steady fall in rental rates in the following years as additional supply continued to outweigh demand. The emirate also started expanding away from the main thoroughfare of Sheikh Zayed Road and out into the desert with a number of new communities.
Dubai average villa rental rates 2008-2019
Today's market is more tenant-driven as landlords use incentives such as multiple cheque payments, no commission or inclusion of utility fees to retain and attract tenants.
Which areas of Dubai have had significant rental changes?
About all of them – no area is totally immune from market dynamics. But there are some which stand out compared with others as rates have returned to levels similar to, or lower than, those that were paid back in 2010 or 2011. In Dubai Marina, for example, the average cost of a one-bedroom apartment in 2008 was Dh130,000, according to data from property services company Asteco, before falling to Dh63,000 in 2011. Rents in the area climbed in later years to as high as Dh113,000, and by the end of 2019 were back down at an average of Dh58,000.
Dubai apartment average rent change 2009-2019
It is a similar story for the prime villa market, a five-bedroom property on Palm Jumeirah would rent for an average of Dh450,000 in 2009 and 2010 before rising to as much as Dh725,000 in 2014, and by the end of last year was back down to Dh440,000.
What is the outlook for 2020?
The general consensus among property companies is that rents will keep falling although the speed of decline may slow.
Apartment rents fell on average by 2.4 per cent in the second half of 2019, according to a recent Property Finder Trends report. “Demand has not been able to keep up with handovers and landlords are having to be flexible to attract and retain tenants,” the report added.
That said, rents fell significantly in areas such as Jumeirah Village Triangle (13.8 per cent), Town Square (10.8 per cent) and Dubai Sports City (10 per cent), where the volume of new unit deliveries was high. As for the number of units coming this year, "I expect 40,000 to 50,000 units to be completed in Dubai in 2020,” said Lynnette Abad, director of Data and Research at Property Finder. Asteco, meanwhile, expects 39,000 new apartments this year and 10,600 villas after a total of 31,000 were delivered in 2019.
"With more supply expected for handover in 2020, retention will become increasingly important and can be achieved through competitive rates/incentives and proactive/professional property management," it added.
Savills expects 40,000 new units this year as projects started a few years ago when market conditions were stronger are completed.
Andrew Cleator, luxury sales director at Luxhabitat, said he sees another good year for tenants and added "this year we should see the larger conglomerate developers focus more on their under construction master communities with units still in the pipeline; Dubai Hills Estate and Dubai Creek Harbour to name a couple".
Lower rents are a boon for families living in Dubai, according to Chestertons.
"The good news for tenants is there will be ongoing opportunity for social mobility as rents are likely to continue to soften," it said in its Dubai Market report Q4 2019.
"As such, families will be able to move to communities once deemed beyond their budget. This includes properties with more bedrooms, better locations and improved facilities."
Chesterstons said the UAE is, however, still providing decent yields in the long-term market for landlords, with "popular communities offering returns of between 6 per cent and 9.5 per cent". Global cities such as London and Hong Kong generate below 5 per cent.
There are still pockets in Dubai which can be developed under better urbanisation plan rather than pushing the boundaries of the city to bring balance between demand and supply, "In order to re-establish balance between demand and supply, I would also encourage not to push the boundaries of the cities. Within the city, there are pockets where there can be development coming, instead of creating developments 30 km away from Dubai and spread it out. We have got to urbanise the city better itself. That is where I hope Dubai will create regulations and focus on new development going forwards," said Thierry Delvaux, CEO for Middle East and Africa at real estate consultancy JLL.
"There needs to be more regulations how much space can be developed every year on the market if we want to reestablish this balance between demand and supply," he said while speaking on the sidelines of a JLL conference on Tuesday.
Delvaux said despite the reports of slowing economy and poor market, the demand for real estate is good in Dubai.
"If you ask a player like Emaar, they are very satisfied with the occupancy and selling rates. If you look at the office market, it is good as well. The only issue we are facing is that of enormous supply. There is more supply coming on to this market than most of the key markets in Europe. If we look at the fundamentals of the market, the demand is very solid. I am very hopeful that this Higher Real Estate Committee of Dubai is going to better regulate the market and come up with regulations to slow down the amount of supply and create a better balance in supply and demand," Delvaux said.
In 2019, 35,000 residential units were delivered in Dubai, the largest number of deliveries in a year. In 2020, around 63,000 units are expected to be handed over with materialization rate of 50 per cent. In Abu Dhabi, the numbers of deliveries were 1,200 in 2019 and this year 900 units are expected to come online.
ValueStart said in its latest report that January 2020 witnessed fewer off-plan sales transaction volume, declining 20 per cent when compared to December last year.
"Similar to 2018, the pace of new project launches eased over 2019 as developers adopted a more cautious approach in response to lower demand and growing supply", said John Stevens, Managing Director of Asteco.
"Whilst the downward trajectory for the short-term is unavoidable due to tepid economic/market conditions and the expected supply glut, the outlook for the medium- and long-term for the UAE is encouraging, fuelled by a pro-active government response and clear focus on economic progress and sustainability," said Stevens.
Rentals bottom outDana Salbak, head of research for Mena at JLL, sees rentals in Dubai have bottomed out as the market matures.
"Rents are close to the bottom of the market in 2020 as we expect some level of stabilisation and normalisation. It is the sign of market maturing and we are moving away from speculator investors and end-user market," she said.
She noted that a huge supply is coming and that will put further pressure. "I don't think there will be an uptick in rentals soon.
"Dubai has a supply problem and Abu Dhabi's issue is more of demand. In Abu Dhabi, supply is controlled but there is a needs to do a bit more to stimulate demand. In Dubai, 2019 has been a year of record initiatives by the government to boost demand. There is a lot of happening in the background in terms of works but these things take time and yes it will have an impact down the line," she added.
While Expo 2020 continues to generate buzz around Dubai and the wider UAE, tens of thousands of new construction projects are underway. Aron Lomax, Managing Partner of the Dubai-based real estate company Treo Homes, believes that 2020 will be “most hyped and talked-about year in the real estate industry’s short but incredible history.” But what does all of it mean for the industry?
The Big One: Expo 2020
First, the “Greatest Show on Earth” will take centre-stage in Dubai this autumn, and Lomax says that it will have a huge impact on the real estate sector.
“How will Expo 2020 affect the market? How can the industry take advantage of the world’s greatest show? Can it stabilise prices? These are just a few of the questions on many stakeholders’ minds,” Lomax told Zawya. “With an estimated 25 million visitors expected specifically for the Expo, there is no shortage of people coming to the city. It has created a buzz and excitement around both the city and the Expo that is infectious.”
More Residents And Tenants In The Long-Term
It is hard to quantify how many of these 25 million visitors will turn into residents of the country or will decide to purchase property here.
“I believe 2020 will have an incredible impact on both the economy and the property market; however, it is going to take anywhere from two years for us to truly see the effects of it,” Lomax said. “I do believe that of the visitors coming for Expo, there is going to be a significant number who will love what this incredible city has to offer, how much value is on offer here, and will choose to take residency here. This is, however, going to take years to come to fruition.”
He continued: “Even if […] 1 percent of the visitors decide to relocate here, this is enough to soak up all of the future planned supply. It is up to all stakeholders at every level of the chain to capitalize on this once-in-a-lifetime opportunity.”
According to Lomax, Expo 2020 could also have an impact on off-plan housing. “Dependent on what Expo-related offers the developers in the city can offer to visitors, we may well see a short-term spike in off-plan transactions, which will be a welcome boost. However, what the market needs right now is an influx of end-users to soak up the new supply coming into the market.”
Apart from Expo 2020, Lomax said a key trend in 2020 will be affordable housing. “This is a sector that previously did not exist only a matter of three years ago and has seen an outstanding boom in transactions, handovers and new launches. This is [giving] families and young professionals who were previously limited to the apartment market open access to a variety of new affordable communities such as Arabella, Town Square, Mira, Mira Oasis, Damac Hills and Dubai Hills. This trend is here to stay and will dominate secondary market transactions in 2020.”
A Congested Marketplace
As developers rush to enter the affordable housing space, there is now an abundance of similar types of properties entering the market, “all at a similar price point, similar location, similar size and competing for a very similar demographic,” says Lomax. “Although this is a sought-after segment of the market, it is difficult to create enough demand for them all, thus creating a micro-market of over-supply.”
According to Property Monitor, there are 50,000 new units in projects already under construction that will hit the market in early 2020. More units means more choice and more competitive rates for tenants.
Asteco Property Management is one of the local real estate agencies that predict rents to further reduce in 2020.
Time To Buy
Expanding and more relaxed payment purchasing plans means 2020 will draw more interest from those wanting to buy instead of rent and from those looking to invest in Dubai’s real estate sector.
According to the Property Monitor Dynamic Price Index, an online tracker of real estate price trends across Dubai, properties have become increasingly more affordable. With the UAE implementing a new system for long-term residence visas, many residents looking to stay in the country for the long haul could start snapping up properties in 2020.
Mortgages: A Tough Outlook
However, Asteco Property Management predicts a less-than-sunny outlook in 2020 for developers and those who have existing mortgage commitments, as capital values are not expected to plummet any further.
Rent Payment Shake-Up
For those who prefer more flexibility when it comes to housing, there is good news for renters as well, in the form of new rent payments terms. Asteco Property Management predicts that direct debit monthly payments will be a trend for 2020 in place of tenants having to fork over lump sums for rent payments.
While a downward projection in the UAE’s real estate market is unavoidable, the medium and long-term forecast in the sector is positive, according to a new report from property services company Asteco.
Asteco’s Q4 UAE real estate report revealed a total of 6,600 residential units were delivered in Abu Dhabi, compared to 31,000 in Dubai.
“Similar to 2018, the pace of new project launches eased over 2019 as developers adopted a more cautious approach in response to lower demand and growing supply,” said John Stevens, managing director of Asteco, adding that construction progress and overly ambitious handover programmes also contributed to the delay.
The report noted that average apartment rental rates in Abu Dhabi fell by 7 percent over the course of the year, while sales prices fell an average of 8 percent. The decrease for villas was less pronounced, with rental and sales reductions of 4 percent, respectively.
The Dubai sales market, for its part, saw drops of 13 to 15 percent for apartments, villas and offices alike. Office rental rates saw the most significant declines – of 12 percent – followed by apartments with 11 percent and villas at 10 percent.
“In an increasingly competitive market, the importance of professional property management and maintenance services has become increasingly crucial and will help proactive landlords differentiate themselves from the competition,” Stevens added.
Giving his forecast for the 12 months ahead, Stevens said: “The downward trajectory in the real estate market for the short-term is unavoidable due to tepid economic and market conditions and the expected supply glut.”
However, he said that “the outlook for the medium-and-long-term for the UAE is encouraging fueled by a pro-active government response and clear focus on economic progress and sustainability”.
Housing rents will continue to inch downward this year for tenants in Dubai and other parts of the country as more residential supply is expected to enter the market, according to property analysts.
Thousands of new units, mostly apartments, are expected to hit the Dubai market early this year, while the neighbouring communities in Sharjah, Ajman and Ras Al Khaimah are also expected to get additional residential supply.
“This increase in supply, coupled with continuous handovers in Dubai, will result in further drops in rental rates across all sectors,” real estate services firm Asteco said in its latest report.
Property rents and sales prices in the UAE have been declining since the fall in oil prices in 2014. Some industry sources have said that the decline could continue until after the World Expo 2020.
Property Monitor had previously reported in December that there are still 50,000 new units that are scheduled for completion in Dubai early this year, with apartments making up the bulk of the upcoming supply.
With this high supply, Chris Hobden, Head of Strategic Consultancy at Chestertons Middle East and North Africa (MENA), agreed there is indeed a likelihood that rents will continue to trend downwards. However, he said, the rate of decline will be lower than what was observed in 2019.
“Overall, Dubai residential rents will likely decline on average, although we expect this to be at a lower rate than over 2019, and rents may level out in certain districts,” Hobden told Zawya on Sunday.
Firas Al Msaddi, CEO of fam Properties, told Zawya that the real estate market has yet to reach the bottom and that it will take about three years for the market demand and supply dynamics to even out, hinting at further downward price movements.
The property market saw the entry of master-planned communities in 2019 that cater to the affordable housing market segment, such as the Phase 2 of Nasma Residences along Emirates Road (E611), as well as the stand-alone projects in various Emirates.
“The growing supply of properties at reduced rental rates in Dubai resulted in an increased number of residents in the Northern Emirates, particularly in Sharjah, relocating closer to their place of work [in Dubai],” Asteco noted.
Dubai is expected to see a fresh supply of 50,000 residential units and 2.5 million square foot of office space in 2020, similar to supply dynamics of previous years in the emirate, according to property consultancy Asteco.
Sale price declines are likely to ease this year, particularly for newly launched projects, as development costs are approaching the lowest practical level, Asteco said in its latest report. Prices in the secondary market, on the other hand, are expected to record additional drops in 2020, it said.“We will continue to see project launches from master developers with construction-linked and post-completion payment plans," the report noted. "Calls from industry leaders or experts for a short-term curb on new projects in order to restore the supply-demand balance are expected to increase.
”Dubai's real estate market has slowed after a drop in oil prices that began in 2014, and has been further pressured by an oversupply of properties. Residential real estate prices dropped by almost 6 per cent last year, according to data from consultancy Reidin.
The Emirate - the commercial and trading hub of the Middle East - in September formed a new higher committee for real estate to tackle supply issues in the market.
The committee set up on the directives of Sheikh Mohammed Bin Rashid, Vice President and Ruler of Dubai is working towards a better supply balance in the emirate's real estate market through greater collaboration between government-related entities and private-sector companies.
How will things change for the Dubai property market in 2020? Have we hit the bottom of the property price decline cycle?
The Emirate’s 50-year plan and the Dubai Expo 2020 will now be key indicators for demand-and-supply trends in the market.Zhann Jochinke, chief operating officer of Property Monitor, says there are 50,000 new units from projects already under construction that will hit the market in early 2020, with apartments making up the majority of the upcoming supply.
Jochinke says developers have announced fewer than half the launches this year as of November compared to 2018 and seem to have instead focused on completing existing projects in their pipeline. “Past years indicate a materialisation rate of 40-50 per cent. It is likely that if the market maintains status quo, developers might deliver 60-70 per cent of the expected units during the year or might choose to pace deliveries to match demand at the time.”
With about 25 million visits expected during Expo 2020 Dubai, the wait now begins to see if the short-term Expo visits can turn into long-term residencies, which will give a further boost to the property market. And as we step into the much-awaited Dubai Expo year, here are some realistic predictions from our experts.
1: Expect rents to decline
With the release of more property in 2020, we expect rents to further reduce next year and into 2021. Good news for those who rent.
– Elaine Jones, Executive Chairman, Asteco Property Management
2: A market for Tenants
There is now more choice in the market for tenants in terms of location, quality and value. Landlords need to keep property well-maintained and attractive to tenants. Professional property management and maintenance services will be in demand to ensure highest occupancy.
– Elaine Jones
3: New terms of rent payment
Expect new ways of rent payments such as direct debit monthly payments to become standard in 2020.
– Elaine Jones
4: Review your mortgage commitments
Regrettably for developers and those that have mortgage commitments, the outlook is tough. Capital values are unlikely to reduce any more as the cost of development itself is at the lowest practical level.
– Elaine Jones
5: Favourable cost of property
With the wide range of deferred payment plans being offered in the market, the opportunities to purchase property at favourable cost will appeal to end users who would otherwise be paying rent. According to the Property Monitor Dynamic Price Index, which tracks property price trends across 42 communities in Dubai, properties have become increasingly more affordable for a larger segment of the population.
Investors and owner-occupiers alike are displaying interest in purchasing properties – a factor that helps lift markets from the bottom – with November 2019 marking one of the strongest months in the past decade. A total of 5,025 sales were recorded with off-plan (Oqood) registrations representing 60.8 per cent, notably higher than the year-to-date monthly average of 55.4 per cent. Residents will definitely look at buying a home rather than renting one as prices have become more attractive.
– Zhann Jochinke
6: Good international investor appetite
The ownership structure and the ability to buy income-generating property at a good yield without capital gains tax and property tax represent excellent opportunities for international investors.
– Elaine Jones
7: Healthy balance between demand and supply
Developers will be more pragmatic when it comes to launching new projects and help create a healthy balance between supply and demand. They are likely to focus on creating the right kind of supply that aligns with the future aspirations of the city and its people.
– Amira Sajwani, senior vice-president, operations, Damac Properties
8: Buy off-plan
The trends for off-plan properties with extremely attractive payment terms will continue to attract new buyers.
– Dounia Fadi, CEO, Berkshire Hathaway Home Services Gulf Properties
9: More keys
With less than a year to go until Expo 2020 Dubai, there will be a great influx of tourists, higher number of hotels opening and rooms being occupied. China is becoming one of the biggest markets in terms of demographics operating in Dubai, and the hospitality sector will have to adapt its strategies and offerings to tailor to the needs of that audience.
Tim Cordon, area senior vice-president, Radisson Hotel Group, MEA
10: Support for SMEs and local businesses
Watch out for more diversification in the economy, which will create a robust economic environment. Once local businesses start flourishing it will become the foundation that will make investing in Dubai more fruitful for everyone. 2020 is the perfect platform to kick-start these initiatives.
– Dounia Fadi
The affordable housing segment is experiencing the strongest demand in Dubai as properties priced below Dh1.5 million dominated transactions in the emirate's real estate market during the first nine months of 2019, latest data shows.
Low-cost properties or affordable housing units' sales registered 10.87 per cent year-on-year growth during the January-September period this year as Dubai recorded 18,858 transactions for properties worth up to Dh1.5 million, compared to 17,009 deals in the same period last year, Property Finder Group's report says.
Analysts said sales and leasing demand for affordable units will continue to outweigh larger properties in Dubai due to a growing young population, higher percentage of bachelors and small families, and greater yields offered to investors.
Experts said a correction in prices is steadily making Dubai property more affordable to investors and end-users. Dubai realty has emerged as a mature and affordable market after shedding almost 25 per cent of its value in the past five years, they added.
"Affordable end-user housing demand is still high and is expected to continue to be the case for many years to come," Haider Tuaima, head of real estate research at ValuStrat, told Khaleej Times. "Our research has found that current prices reached previous low levels of 2012, which in turn is prompting many households to consider and/or move to Dubai from the Northern Emirates," he said.
Data Finder's statistics showed that 6,888 transactions were registered in Dubai for properties valued between Dh1.5 million to Dh3 million during the first nine months of 2019, while properties valued between Dh3 million to Dh5 million recorded 2,196 transaction during the period. It further noted that 726 deals for properties valued between Dh5 million to Dh10 million and 520 transactions for properties worth more than Dh10 million.
John Stevens, Managing Director at Asteco Property Management, said properties in Dubai have become more affordable in the global context due to availability of 'unlimited land' for development compared to very saturated and restricted markets of London and Hong Kong, among others.
"Affordability is not only measured in terms of the price, but also in regards to payment terms. Developers have shifted their focus to the price and flexible payment plan due to global/regional headwinds and the general squeeze in purchasing power," he said, adding that this trend is not expected to change in the short- to medium-term period.
Farhad Azizi, CEO of Azizi Developments, said the affordable housing segment is experiencing the strongest demand - significantly more than luxury properties.
"Expo 2020 reinforces demand for affordable units, as it solidifies Dubai's standing as a global hub for business and tourism and sets strong fundamentals for long-term growth across a multitude of industries, including real estate," Azizi told Khaleej Times. "This world-class event, and especially its after-effects, will result in an increased number of visitors, business relationships being formed and infrastructure investments being driven, propelling the vision of Dubai's visionary leadership."
"With the emirate retaining a large number of visitors and jobs being created, the event boosts demand. The affordable segment benefits from this the most, as new residents tend to prefer value-for-money units as their initial homes," he said.
Affordable units supply
Stevens of Asteco said there is enough stock coming to the market, but whether it will meet affordable the housing requirement is a different question.
Referring to the Dubai Statistics Centre's Labour Force Survey in 2014-15, he said approximately two-thirds of people earn less than Dh5,000 per month.
"This means that a large population is not eligible for a mortgage because it requires a Dh15,000 minimum salary. This segment cannot buy off-plan units also as most developers require a minimum income of Dh10,000," he said.
Stevens said that while many residents have been able to upgrade to larger and/or better units due to increased supply and declining rates, a significant number of people still live in shared units as the current 'affordable housing' is inaccessible to them.
"The number of affordable properties is expected to rise amid considering present and future supply that will intensify competition among the developers," Stevens said.
Azizi said there is ample supply in the market and developers are sure to meet investor interest - some better than others.
"Units need to be the right types and sizes, situated in prime locations, have the desired amenities and have the right connectivity and accessibility to major business, leisure and retail hubs. Those whose developments meet these criteria will thrive and see a substantial increase in sales," he said.
Tuaima of ValuStrat said some developers are meeting demand for affordable housing units by building smaller and more practical residential spaces, as well as offering easy payment plans.
"Our research has shown that new-build average prices per square foot are still relatively high when compared to older ready counterparts," he said.
Data Finder's statistics also showed that established communities saw higher demand for ready units, with Business Bay ranking highest at 1,036 sales in the secondary market. Other popular communities were Dubai Marina (942), International City (939), Jumeirah Village Circle (783) and Al Furjan (677).
"There are many units set to be completed which fall within the affordable category, therefore when they become available in the market, we should expect to see sales activity in the secondary market continue to increase over the next year," said Lynnette Abad, Director of data and research at Property Finder.
Ultra-wealthy investors continue to invest in Dubai’s real estate, spending serious sums of money on luxury homes in established communities, a new report said.
According to Property Finder, this year, between January and October, the super-rich snapped up more than 200 apartments and villas worth over 10 million dirhams.
The most sought-after locations include Downtown Dubai, where 34 flats were sold, and Palm Jumeirah, which closed 31 deals. Together, these account for more than half of all luxury home sales during the review period.
In Downtown Dubai, buyers were interested in Emaar's IL Primo project in the Opera District, which accounted for 18 out of the total flats sold in the area. Bigger apartments in the 77-storey tower can fetch prices in excess of 18 million dirhams, according to published ads.
Posh apartments in the Royal Atlantis Resort and Residences in Palm Jumeirah seem to be a clear favourite, accounting for 13 out of the total 31 luxury apartment transactions in the first 10 months of the year. Alef Residences on the man-made island also managed to sell eight of its multi-million-dirham apartments.
Also, this year, a lone penthouse in The One at Palm Jumeirah sold for a staggering 74 million dirhams was the second-highest price ever paid for a property in Dubai in 2019.
Other locations also saw high investor interest: Business Bay, registered five deals above 10 million dirhams. Jumeirah, Jumeirah Beach Residence and Dubai Creek Harbour netted four deals each.
New projects such as Bluewaters Island and Dubai Harbour generated interest as well, but the old favourites, such as Dubai Marina and Al Barari, didn't shine as much, accounting for only a "handful" of the transactions, Property Finder Said.
For luxury villas, residential properties in both established and new communities drew interest, but the highest performer was Dubai Hills Estate, with 47 deals above 10 million dirhams, followed by Palm Jumeirah (43), MBR City (32), Emirates Hills (22) and Jumeirah Golf Estates (13).
“Dubai Hills Estate has fared well across all price points and has been a popular community for both investors and end-users. The amenities, outdoor spaces, new shopping mall and nice mix of office and retail has been very attractive for buyers,” said Lynnette Abad, Director of data and research at Property Finder.
Within Dubai Hills Estate, well-heeled buyers set their sights on Emaar’s villa projects such as Golf Place and Parkway Vistas did particularly well.
Other luxury projects on the Palm that attracted majority of buyer interest were Signature Villas, Jumeirah Zabeel Saray, XXII Carat, Kingdom of Sheba and Emerald Palace Kempinski Hotel.
Other new villa projects that saw luxury house deals were Jumeirah Bay Island, Dubai Waterfront and Akoya by Damac.
Traditional favourites such as Umm Suqeim, Al Barari and Polo Homes in Arabian Ranches also figured prominently in the preferences of luxury house seekers.
Dubai’s real estate market has recently witnessed an uptick in transactions, owing in part to government initiatives that seek to boost investor confidence. However, some analysts claim that the sector will continue to encounter some headwinds due to global factors, including Brexit and the US-China trade conflict.
In September, the Higher Real Estate Planning Committee was unveiled to coincide with efforts to lower the risk of oversupply in the property market, among other objectives.
Subsequently, the Dubai Land Department reported an increase in the volume and value of transactions in recent months.
According to property consultancy firm Asteco in its Q3 2019 report, the increase in transactional activity may be the result of “increased choice, affordability, payment/ finance options” in the market.
However, it is also important to point out that Dubai’s property market is greatly driven by sentiment, Asteco said, adding, “positive/ encouraging government announcements often result in short-term peaks in activity.”
“Despite these efforts, prolonged global economic headwinds, mainly due to US-China trade tensions and uncertainties surrounding Brexit, are likely to continue to weaken employment growth and spending, which will dampen real estate investment,” said Asteco.