With notable projects by trusted builders such as Emaar, Meraas and Dubai Properties grabbing the attention of the global market, both the off-plan and secondary market in Dubai have started off on a fairly positive note in the first quarter of 2019. Search trends show that interest remains high on luxury destinations such as Dubai Marina, Downtown Dubai and Palm Jumeirah, all of which feature in the list of top 10 most popular areas with users. There has been a minor decline in sales and rental prices in Q1 2019 compared to those seen in Q4 of 2018, but changes remain modest.
Sales Highlights:
- Continuing the trend seen across most parts of 2018, Dubai Marina takes the crown as the most popular area for apartment sales with Marina Diamonds being the most-searched building in the area for Q1 2019. The upscale apartments here have an average ROI of 6.4%. Arabian Ranches takes the top spot for villa sales with an ROI of 5.8%. The sub-community of Al Reem is predictably the most popular with potential investors.
- The most notable of the price changes for apartment sales is an 8.6% decrease for 1-bedroom units in Business Bay, where prices fell from AED 1.12M in Q4 2018 to AED 1M in Q1 2019.
- For villa sales, the most significant changes have occurred in DAMAC Hills, where prices for 4-bedroom units have seen a decline of 9.7%, falling from AED 2.88M to AED 2.6M. This could be attributed to the handover of more units, creating a larger portfolio of units with smaller square footage than what was available in Q4 of 2018.
Rental Highlights:
- Dubai Marina bounces back to the top position for apartment rentals in Q1 2019, with Marina Pinnacle being the most sought-after building for potential tenants. For villa rentals, Mirdif remains the most popular area, while Uptown Mirdif accounts for the majority of the searches in the area.
- For apartments, Deira has seen the most significant changes in rental prices in Q1 2019. 2-bedroom units here have declined in prices from AED 90k in Q4 2018 to AED 80k now.
- Regarding villa rentals, 4-bedroom units in Umm Suqeim have dropped by 7.5%from AED 200k in Q4 2018 to AED 185k. Meanwhile, 3-bedroom villas in the established area of Jumeirah have risen by 6.3% from AED 160k to AED 170k in Q1 2019, which could be attributed to an increased interest in family-friendly villas close to schools, hospitals and other amenities.
Apartment Sales
Over the last quarter, sale prices for apartments in Dubai Marina have experienced a minor decline. When compared to Q4 2018, 1-bedroom units in the area have seen the most significant decrease of 3.3% with prices dropping from AED 1.19M to AED 1.15M. Meanwhile, average prices for studios and 2-bedroom units have also decreased marginally and stand at AED 800k and AED 1.9M respectively for this quarter.
Most areas in Dubai have seen modest declines in sale prices under 6% with the exception ofBusiness Bay and Jumeirah Beach Residence (JBR). Business Bay has seen prices for 1-bedroom units drop by 8.6%, while prices for the same in JBR have declined by 6.7%.
However, affordable communities such as International City and Dubai Sports City have witnessed an uptick in prices for 2-bedroom units. Prices for these units in International City have risen from AED 690k to AED 700k, while in Dubai Sports City, prices have jumped from AED 875k to AED 900k. Interestingly, both areas also boast the highest ROI in Q1 2019 for apartments. The average ROI in International City stands at an impressive 9.7% while Dubai Sports City’s apartments deliver an ROI of 7.9%.
Meanwhile, the sale price for studio apartments in JBR has also climbed by 1.8% from AED 990k in Q4 2018 and average at AED 1.01M in Q1 2019.
Apartment Rentals
Dubai Marina bounces back to the top position for apartment rentals in Q1 2019. Its return to the top spot can be credited to renters looking to take advantage of attractive prices and upgrade to the premium location. The rental prices for apartments in Dubai Marina have remained largely stable. Studios and 1-bedroom units here have remained steady at AED 55k and AED 80k respectively. However, 2-bedroom apartments have seen rentals fall by 4.2%, pushing prices down from AED 120k to AED 115k.
Other notable changes include a fall in rental prices for 2-bedroom units in Deira andDowntown Dubai. Potential tenants can now find a 2-bedroom apartment in Deira for AED 80k, while the same unit in Downtown Dubai averages at AED 127k in Q1 2019.
The only area to witness an increase in rental prices is Dubai Silicon Oasis, where 2-bedroom apartments have risen by 4.2%, from AED 72k to AED 75k. The increase in prices here can be attributed to the addition of larger units in the market for this property type and recent handovers of completed projects.
Villa Sales
Arabian Ranches continues to be the most popular location with potential investors. The sale prices for 3-bedroom villas here have dipped by a significant 7% over the last quarter, from AED AED 2.79M to AED 2.6M. However, 4 and 5-bedroom units have experienced little to no change, standing at AED 3.8M and AED 4.5M respectively.
Another area that has seen a substantial decline in prices is DAMAC Hills (Akoya by DAMAC). Prices for 4-bedroom villas have fallen from AED 2.88M to AED 2.6M in Q1 2019, while 3-bedroom units have declined from AED 2.55M to AED 2.4M.
The family-friendly area of The Springs has also experienced a fall in sale prices for 4-bedroom villas. These units now average at AED 2.66M, dropping by 8.1% in Q1 2019. The Springs also remains as the area with the highest ROI for villas in Dubai at 6.3%.
In the exclusive community of Emirates Hills, 6-bedroom units are most popular amongst investors, consequently raising prices by 3.4% for these high-end units from AED 29.9M to AED 31M in Q1 2019. 4-bedroom units in Emirates Hills follow in popularity and have witnessed a slight decrease of 0.9% in prices, with average sales price dipping to AED 17M.
Palm Jumeirah is another area where sale prices have witnessed an upswing for certain units. Investors will find that prices for 5-bedroom villas in Palm Jumeirah have increased by 3.1%, raising prices from AED 16M to AED 16.5M.
Villa Rentals
Mirdif continues to dominate as the most-searched area for villa rentals in Dubai. However, prices for 5-bedroom villas in the area have decreased by 6.7%, from AED 142k to AED 132.5k in Q1 2019. Otherwise, prices for 3 and 4-bedroom units have remained steady at AED 105k and AED 120k respectively.
Other notable price changes included a fall in prices by 7.8% for 5-bedroom units in Palm Jumeirah, now averaging at AED 415k. Similarly, 4-bedroom units in Umm Suqeim have also dropped by 7.5% in rental prices, dropping from AED 200k to AED 185k.
Established areas like Jumeirah and Al Barsha have seen an uptick in rental prices for 3-bedroom units. Potential tenants will find that these units in Jumeirah have risen from AED 160k to AED 170k and in Al Barsha from AED 150k to AED 155k.
Rental prices in the popular location of Arabian Ranches have remained stable for all units, experiencing no change over the last quarter.
Most Popular Villa Sub-Communities
For villa sales, Al Reem remains the most-searched-for sub-community within Arabian Ranches, drawing in 47.9% of overall investor interest. Meanwhile, the luxury Signature Villas account for a significant 57.5% of the searches in Palm Jumeirah. Lastly, Living Legend brought in the lion’s share of interest in Dubailand.
Uptown Mirdif gathered an overwhelming 79% of searches by renters in Mirdif, cementing itself as the most popular villa sub-community. Similar to villa sales, Al Reem is most popular with potential tenants in Arabian Ranches for rentals, generating 58.5% of searches in the area. Finally, Jumeirah 1 drew in the majority of the interest by renters looking at villas in Jumeirah.
Most Popular Off-Plan Projects
Akoya Oxygen, Mohammed Bin Rashid City (MBR City), Downtown Dubai andJumeirah Village Circle (JVC) were Dubai’s most popular locations for off-plan projects and attracted significant attention from investors.
Within Akoya Oxygen, the Just Cavalli Villas were a favourite with potential investors, generating 22.2% of overall searches. While in MBR City, Sobha Hartland was the most popular off-plan project and drew in 34.8% of the searches.
Forecast for Q2 2019
Haider Ali Khan, CEO of Bayut, said: “The first quarter of 2019 appears to be continuing in the trajectory we observed in the last few months of 2018, with prices remaining largely unaffected in prominent areas such as Dubai Marina and Arabian Ranches, or reducing marginally. An interesting trend we noticed in 2018, which continues in this quarter is the growth in search volume for more affordable, well-integrated, suburban neighbourhoods like Dubai Silicon Oasis, JVC and Dubai Sports City. These areas have incidentally shown a slight increase in prices but continue to remain popular because of their favourable reputation as well as high ROI. The move toward community-based living is also echoed in the city’s popular off-plan locations, which feature fully integrated projects like Akoya Oxygen and MBR City.”
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 Abu Dhabi.
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