Dubai luxury home sales outperform market
Sales of prime residential units almost double from last quarter, with Dubai Marina emerging as top performing area
The prime residential market in Dubai beat the overall residential market by nearly doubling the volume of sales from Q4 in 2015. This quarter, the prime residential market completed Dh3.2 billion in sales compared to Dh1.6 billion in Q4 2015.
Communities considered as prime residences include Emirates Hills, Palm Jumeirah, Downtown Dubai, Dubai Marina, Jumeirah Islands, Meadows, Lakes, Victory Heights, Business Bay, Jumeirah Lakes Towers and Arabian Ranches.
The overall residential market on the contrary showed a decline in sales from the previous quarter, revealing a 16 per cent drop in total value of sales from Dh6.9 billion to Dh5.8 billion.
The increase in prime residential market sales can be atttributed to a slight decline in price points (in Dh/sqft) over the last quarter by one per cent compared to the overall residential market which declined by two per cent from the last quarter.
Prices in the prime residential markets are 28 per cent higher than the overall market in Q1 2016.
Ian Kirkby, luxury sales director at LuxHabitat, says there is a renewed interest among buyers. "The main reasons include the new accounting policies from private banking in European countries, changes in tax laws in India and the general global economic situation. A lot more ultra high net worth individuals are finding Dubai to be a safe haven for investing in properties."
In the prime residential market, apartments sold three times as much as villas, with Dubai Marina closing Dh578 million in sales, followed by Palm Jumeirah apartment sales at Dh341 million.
In the villa market, Emirates Hills dominated with Dh263 million in sales, followed by the Palm Jumeirah at Dh237 million and The Springs and The Meadows not far behind at Dh236.7 million.
Commenting on Dubai Marina's performance, Brigitte Tenbergen, Dubai Marina luxury sales specialist, says: "There is a lack of good quality units in the Marina. The good quality ones are less inelastic in terms of price compared to some other buildings."
According to Sally Ann Ghai, luxury sales specialist at Luxhabitat for the Emirates Living areas that include Emirates Hills, the Springs, Meadows and Lakes: "The end of 2015 saw a little bit of low hanging fruit opportunity in the Emirates Living area, but nothing too dramatic. There has been consistent interest from buyers over the last year, but many have been too opportunistic and not genuinely motivated. This is an affluent area in a prime location, so massive value drop expectations are unrealistic.
"However, there has been some sustained price softening in the Lakes and Meadows, and I think the more experienced buyers have seen enough price stability to call the bottom of the market in this area and make a realistic judgement call.
It's still an end-user community, so this is a long-term decision, but I think we will start to see prices slowly gain by the end of this year and into 2017. Buyers who are waiting for further reductions may find themselves disappointed if they don't make a move soon."
As per the new Millionaire Migrations report by New World wealth, Dubai experienced an influx of 2,000 millionaires in 2015, which is a five per cent addition to the city.
In terms of properties above Dh5 million, sales remain stable. Over 394 properties above Dh5 million were sold in Q1.
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