Luxury homes no longer dominate the Dubai property market. Last year, 41 percent of the overall transactions for residential properties in Dubai were priced below 1 million UAE dirhams ($272.2 thousand), according to data released by Property Finder.

These sales usually involve studio and one-bedroom apartments. The report noted that this is a big shift for the Dubai market, where buying activity has traditionally focused on the luxury segment. Out of the 37,788 registered residential transactions last year 15,516 were in the under-one-million dirham market.

“In H2 of last year, we started to see an increase in investor activity buying studios and one bedrooms, presumably gearing up toward Expo 2020 with rental income in mind,” Lynnette Abad, Director of Data & Research at Property Finder said.

Investors can pick up good deals for rental investment for this price and many first-time home buyers often consider a property priced below 1 million UAE dirhams, with entry prices and down payments more affordable and yields reaching 8 to 10 percent for the right deal, Property Finder said.

The shift is also seen on the developers’ side, who want to be able to cater to latent demand from the mid-income market by building affordable properties. They are also offering competitive payment plans and other incentives, the report noted.

Preferred communities

Communities with the highest number of overall sales for residential properties priced below 1 million UAE dirhams in 2019 are: Jumeirah Village Circle (1,473 transactions), International City (1,426), Meydan (1,079), Business Bay (976) and Jumeirah Lakes Towers (887), according to real estate insights and data platform, Data Finder.

The emirate registered 9,044 off-plan transactions for units below 1 million UAE dirhams, with Meydan accounting for the most deals (1,040) in the off-plan market, followed by Dubai Hills Estate (812), JVC (783), Business Bay (768) and Dubai South (689).

There were 6,472 deals on the secondary market for properties priced below 1 million UAE dirhams in 2019. International City accounted for most of those deals (1,128) followed by JVC (690), Al Furjan (507), Dubai Sports City and Dubai Marina (469 each).

(Writing by Gerard Aoun; editing by Seban Scaria)

(gerard.aoun@refinitiv.com)

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