Prime residential sales almost double from last quarter, with the Dubai Marina emerging as top performing area with AED 578 million in sales.
The prime residential market beat the overall residential market by nearly doubling the volume of sales from Q4 in 2015. This quarter, the prime residential market completed AED 3.2 billion in sales compared to AED 1.6 billion in Q4 2015, showing renewed investor confidence in the real estate market. Communities considered as prime residences include Emirates Hills, Palm Jumeirah, Downtown Dubai, Dubai Marina, Jumeirah Islands, Meadows, Lakes, Victory Heights, Business Bay, Jumeirah Lake Towers, and Arabian Ranches. The overall residential market on the contrary showed a decline in sales from the previous quarter, revealing a 16% drop in total value of sales from AED 6.9 billion to AED 5.8 million.
The below infographic is a summation of our analysis on the Dubai Prime Residential Market so far:
What could be attributed to the increase in prime residential market sales is the slight decline in price points (in AED/sqft) over the last quarter by 1%, compared to the overall residential market which declined by 2% from the last quarter. Prices in the prime residential markets are 28% higher than the overall market in Q1 2016. Luxury Sales Director, Ian Kirkby says that there is a renewed interest amongst buyers.
The main reasons include the new accounting policies from private banking in the European countries, changes in tax laws in India and the general global economic situation.
In the prime residential market, apartments sold three times as much as villas, with Dubai Marina closing AED 578 million in sales, followed by Palm Jumeirah apartment sales at AED 341 million. In the villa market, the Emirates Hills area dominated with AED 263 million in sales, followed by the Palm Jumeirah at AED 237 million and The Springs & Meadows not far behind at AED 236.7 million.
Commenting on the superior performance in the Dubai Marina, Brigitte Tenbergen, our Dubai Marina Luxury Sales Specialist says that most of the end-user buyers give very firm, serious offers. “The good quality units in Dubai Marina are less inelastic in terms of price compared to some other building developments”, she says.
There is however, a lack of good quality units in the Marina.
Sally Ann Ghai, Luxury Sales Specialist at Luxhabitat for the Emirates Living areas that include Emirates Hills, the Springs, Meadows and Lakes commented saying, “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 confident, experienced buyers have seen enough price stability recently to call the bottom of the market in this area and make a measured, 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.”
I think we will start to see prices slowly gain by the end of this year in and into 2017 for the Emirates Living area. Buyers who are waiting for further reductions may find themselves disappointed if they don't make a move soon.
With the advent of the new Millionaire Migrations report by New World wealth, Dubai experienced an influx of 2,000 millionaires in 2015, which is a 5% addition to the city. In terms of swankier properties above AED 5 million, sales remain stable, if not tapering. Over 394 properties above AED 5 million were sold in Q1.