2018 Dubai Residential Market Report

A market shift towards quality.

17 Jan 2019, words by Aneesha in The Market

Emirates Hills

An overall analysis of the Dubai residential market in 2018 revealed that over 5,454 villas and 25,595 apartments were transacted within 2018 in the overall residential market. Volume of transactions in the secondary market was AED 74.7 billion, compared to AED 82.6 billion in 2017 (a 10% drop), according to analysis by Luxhabitat based on data by Property Monitor.

Off-plan market

Off-plan transaction volumes dropped 34% from the previous year to AED 23 billion. Opening the off-plan market in Jumeirah was a much needed bolster for the real estate market as it emerged as the top performing area in 2018. World islands, City walk, Port de la Mer, Jumeira Bay and Madinat Jumeirah all have contributed to sales in the area. Brigitte Tenbergen, Associate Director at Luxhabitat reiterates that the Jumeirah area has received an overwhelming amount of interest.

Prime Residential market

According to Luxhabitat’s analysis, the prime residential market in 2018 totalled AED 39 billion, which is approximately 11% lesser than the previous year. Luxhabitat defines the prime residential market as a residential market composed of properties that lie on the high-end spectrum of the Dubai residential market. Luxhabitat recognises 15 key areas that form part of this classification; the areas are Al Barari, Arabian Ranches, Downtown Dubai, Dubai Marina, Dubai Creek Harbour, Business Bay,Emirates Hills, Jumeirah, Jumeirah Beach Residence, Mohammed bin Rashid city, Jumeirah Golf Estates, Jumeirah Islands, Jumeirah Lakes Towers, Palm Jumeirah, The Lakes, Meadows, & Victory Heights.

The top 3 areas in terms of sales volume were Business Bay (AED 6.9 billion), MBR City (AED 6.3 billion) and Downtown (AED 5.4 billion).

Key observations

1. The average price/ square foot for villas that transacted has increased, indicating interest for higher end and better quality units. 

2. Demand for ready to move in secondary market villas has doubled as resident families look to move into villa communities. Arabian Ranches 2 seems to be a popular area, with a 47% increase in sales from the previous year, presumably owing to more launches in 2018. 

3. Off-plan investments in apartments remained steady. 

4. The data also indicates that it also more expensive to buy off-plan properties than in previous years, a 8.4% increase. However, it is deduced that the average size of off-plan units transacted has also reduced from an average BUA of 1,100 sqft to 917 sqft (6.2%). The gaps between the pricing of off-plan properties and secondary market properties is minimal. Developers will need to offer more incentives than at their current levels. As the supply increases, there is a larger pool of investments to choose from. 2019 looks to be a buyer’s market, with further price stabilisation.

Read the rest of the press release here.