Off-plan properties dominate the 2017 Dubai Prime Residential Market
Words by Aneesha Rai in The Market · Jan 17th, 2018
On analysis of data by REIDIN, Luxhabitat reveals that the prime residential market has an uptick in sales volume this year. The average price per square feet has also marginally increased. According to Luxhabitat, the prime residential market is composed of properties that lie on the high end spectrum of the Dubai residential market.
Luxhabitat recognises key areas that form part of this classification; the areas are Al Barari, Arabian Ranches, Downtown Dubai, Dubai Marina, Emirates Hills, Mohammed bin Rashid City, Dubai Hills, Jumeirah Bay, Bluewaters Island, Jumeirah, Jumeirah Beach Residence, Jumeirah Golf Estates, Jumeirah Islands, Jumeirah Lakes Towers, Palm Jumeirah, The Lakes, Springs and Meadows, & Victory Heights.
There seems to be a sudden dip in transactions for the off-plan residential market in Q2 2017. This is presumably because of the slow-down of new development launches and the Ramadan period. In 2017, the price/sq ft for prime residences are AED 1,482 per sqft. The prices have shown a definite increase and are now comparable to the same levels as Q4 2015. The total volume of transactions in 2017 for the secondary prime residential market was AED 13.1 billion, an approximate 10% increase since last year. 82% of the total number of transactions in 2017 were for apartments. The top 3 performing areas were: the Dubai Marina transacting approximately AED 3.34 billion, followed by the Palm Jumeirah (AED 2.32 billion) and Downtown Dubai (AED 1.54 billion). These three areas alone account for 42% of the secondary prime residential market.
In terms of the villa market, the total volume was AED 4.4 billion. 50% of the transactions came from the Emirates Living areas, which includes Emirates Hills, Springs and the Meadows, and The Lakes. The most expensive villa transacted was a 22,780 BUA square feet villa in Emirates Hills for AED 95 million. The Emirates Hills area alone transacted AED 816 million. The apartments market had a total volume of approximately AED 13.8 billion in sales.
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Off Plan Market
The total off-plan market for prime residential communities was worth AED 16 billion. Luxhabitat sold the second most expensive penthouse in Dubai at AED 60 million. Downtown Dubai sold the most in terms of off-plan (AED 5.8 billion), followed by the new communities of Dubai Creek Harbour (AED 2.9 billion) and Mohammed bin Rashid city inclusive of Dubai Hills (AED 2.7 billion).
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What Our Experts Say
Associate Director, Brigitte Tenbergen enunciates the popularity of off-plan properties in the prime residential market. “I have experienced a strong demand in off plan- especially in the higher segment and mostly situated on the beachfront.” Says Tenbergen. “Most of these developments will be handed over in 2018 or mid 2019 and all have show apartments which makes the choice very easy. The existing developments are getting "tired" and clients are looking for modern, contemporary design and open spaces with great views and good quality.”
Sally Ann Ghai, Associate Director at Luxhabitat says the sentiment seems positive for an improvement in sales volume during 2018, with high buyer interest and engagement. “Sellers, having had a tough year up against the high level of off plan sales, have accepted reality and adjusted prices accordingly to signpost their serious intention to sell. However, buyers should not take this signal of reasonableness as an invitation to charge in with even further low ball offers on already softened prices. Sellers have responded to market data that the end-user market in Dubai has undertaken a permanent correction. Buyers should not interpret the reasonable pricing now appearing as a crash market portend, but rather a considered response to concrete sales data by reasonable sellers. Buyers should be thankful that the market has responded to their accusations of price stubbornness, and appreciate they can now acquire a home at a relative bargain in 2018.” Said Ghai.
For the rental markets, Rentals Director Ryan Kasper added, “Rental prices for prime properties have followed similar trends of the general market. Most luxury apartment and villa prices have remained relatively stable, although we have witnessed a longer marketing period between tenants, and more flexibility in payment terms among landlords.”