Lots of demand in Q3 for freehold areas in Jumeirah
Words by Aneesha Rai in The Market · Oct. 28th, 2018
An overall analysis of the Dubai residential market in Q3 2018 revealed that over 1,247 villas and 5,121 apartments were transacted within the second quarter of the year in the overall residential market. Volume of transactions in the secondary market during Q3 2018 was AED 16.9 billion, compared to AED 12.1 billion in Q2 2018, according to analysis by Luxhabitat based on data by Property Monitor.
Off-plan transaction volumes dropped almost 29% from the previous quarter to AED 4.5 billion. Overall, there’s a significant drop over the past two quarter. However, the opening of the off-plan market in Jumeirah in Madinat Jumeirah, Jumeira Bay, Port de la Mer and other areas has led it to become the top selling area in Q3, with over AED1.3 billion in sales and over 152 units sold. It’s also worth noting that there’s still a healthy market for off-plan, with about 60% of the total sales in the Dubai residential market being derived from off-plan. Brigitte Tenbergen, Associate Director at Luxhabitat comments, “Jumeirah has traditionally been a leasehold area, complete with plots and villas, mostly owned by GCC nationals and rented by well to do expats. With the launch of freehold projects like Port de La Mer and Madinat Jumeirah Living, it holds a lot of promise for the Dubai real estate residential market to pick up. There’s been an overwhelming demand for apartments in these projects. These projects also have a relatively reasonable price tag and have been a major success. I look forward to more off-plan releases this quarter.”
Prime Residential Market
According to Luxhabitat’s analysis, the prime residential market in Q3 2018 totalled AED 8.7 billion, which is 13.9% lesser than the previous quarter, which indicates a healthy real estate market that has quite a few opportunities in the off-plan market. 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 14 key areas that form part of this classification; the areas are Al Barari, Arabian Ranches, Downtown Dubai, Dubai Marina, Dubai Creek Harbour, 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 Jumeirah (AED 1.3 billion), Downtown Dubai (AED 1.2 billion) and Mohammed bin Rashid city (AED 1.06 billion). Dubai Creek Harbour as a new area has also received healthy sales volumes of AED 655 million this quarter (funnily, with all properties ending with 888- a lucky Chinese number, indicating the nature of the investors in the area). These numbers are comparable with Dubai Marina, which received a sales volume of AED 662 million.
Luxury Rentals Market
Ryan Kasper, Luxury Rentals Director at Luxhabitat comments, “This quarter has seen a continued drop in rental prices throughout Dubai's prime residential areas. However, landlords are using more creative means by which to maintain their rental returns and lure in tenants. This includes offering a 13-month rental contracts, renovating and upgrading older properties, as well as more owners furnishing and renting their properties on a short-term basis. Demand for high-end luxury properties (renting on average for over AED 400,000) has been maintained and is expected to continue throughout the next quarter.”
Read the rest of the press release here.