Dubai prime homes see modest price growth in Q2
Dubai Marina remains the top-performing prime community
Despite the global turmoil caused by Brexit and other geo-political events, Dubai's prime residential market remained stable in the second quarter of the year, reflected by a modest 0.03 per cent growth. Dubai Marina remained the top-performing prime community in Q2.
The overall residential real estate market witnessed a slump by 13 per cent over the last quarter, according to Reidin and Luxhabitat.
Prime residential properties are those that lie at the high-end of the Dubai residential market. Luxhabitat recognises 10 such areas: Arabian Ranches, Downtown Dubai, DIFC, Dubai Marina, Emirates Hills, Jumeirah, Jumeirah Beach Residence, Jumeirah Islands, Palm Jumeirah, The Lakes, Springs and Meadows, and Victory Heights.
Jason Hayes, head of new developments at Luxhabitat, said: "This figure may not be seen as staggering growth but it demonstrates stability in Dubai's prime market. Q2 has seen some prime new developments released to the market and investor appetite has proven to be robust. The Dubai Hills Estate has gone from strength to strength in Q2 with projects such as Fairways Vistas selling out. These launches demonstrate the market demand for quality luxury off-plan developments. Downtown projects continue to stall. I envisage an uplift in transactional activity in Q3 and Q4."
Dubai Marina emerged as the top-performing area, with over 356 transactions. Price per square feet in the area has declined from the last quarter by seven per cent. Prices for the Dubai Marina peaked in 2014 and has been steadily declining since then.
Daniel Garofoli, luxury sales specialist of Luxhabitat, said: "Apartment prices per square feet for properties in quality towers with the best layouts and views are stable. The fall of the price per square feet of the overall market is cause by investment units, 1-beds with low floors and courtyard or no good view. These are selling for any price at the moment. However, buying in a supreme location always gets you the money back and the return on investment per year."
The second-highest ranking area in terms of number of transactions is Downtown Dubai with 169 transactions. Prices are trading below 2013 levels at Dh2,142 per square feet.
In terms of the Palm Jumeirah, sales remain robust with an increase in price per square feet of 13 per cent from Dh1,905/square feet in Q1 to Dh2,160 per square feet in Q2. The Palm also reported the highest volume of sales at Dh558 million. The villas on the Palm average at Dh2,709 per square foot, whereas the apartments are sold at Dh1,612 per square foot.
For the Emirates Living areas that encompasses The Springs and the Meadows, The Lakes and Emirates Hills, luxury sales specialist Sally Ann Ghai said the prices for these properties have bottomed out.
"More confident buyers have already spotted bargains and made their purchases. Less experienced end-users behave more cautiously. Recently, people seem to be more convicted that the next few months will be their optimum time to buy.
"Not all sellers are prepared to enter the market while prices are low, and as transactions increase, the supply of well-priced property in the area will reduce. While favourable exchange rates continue to support sellers relocating to Europe, and may help to protract the bottom of the market, I foresee a solid performance in Emirates Living to the end of the year. Successful buyers should soon feel validated that they made their decision to buy at the right time.
"Over the last two years, we have seen a high amount of window shopping due to uncertainty over the potential for even cheaper buys if they hang on long enough. However, that would strongly suggest that there is an awful lot of pent-up demand which is now, gradually, converting into market activity," concluded Ghai.
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