KHALEEJ TIMES, Wednesday, Oct 9, 2019 | Safar
Dubai offers good conditions for property buyers
Emirates: Attractive property
prices due to moderate declines, pro-active government measures, a maturing
market, and renewed interests from first time home-buyers as well as investors
appear to have given Dubai's real estate sector more reasons to be upbeat in the
fourth quarter, according to property experts.
A steady but slow return to vibrancy is also discernable across the market,
which is reflected in the Dubai Land Department's (DLD) report which confirms
that the value of real estate transactions in the emirate has grown by 12 per
cent in 2019 compared to the same period last year.
As per Bayut's latest Q3 2019 market report, Dubai's property market presents
good conditions for buyers, investors and renters in the final quarter of the
year. While luxury and suburban areas gain traction with home buyers and
investors, tenants are taking advantage of favourable prices to upgrade to
"Communities such as Palm Jumeirah, Dubai Marina, Downtown Dubai and Jumeirah
Village Circle are at the forefront for sales, while established areas like Al
Nahda, Dubai Marina, Mirdif, Bur Dubai and Jumeirah lead the rental market,"
says the report.
Based on the comparison of third quarter prices with the second quarter, Bayut
report suggest moderate declines in average price per square foot across the
board for properties on sale. However, suburban areas such as Dubai Sports City
and Dubai Silicon Oasis are gaining traction with investors, and have
experienced only minor price decreases. "This is in line with the demand for
cost-effective properties, especially from first-time buyers, who made up 66 per
cent of the total investors in the Dubai real estate market for 2018 as per
DLD's finding," the report said.
PNC Menon, founder and chairman of Sobha Group, said given Dubai's status as a
sought-after commercial and tourism hub and the maturing nature of the market,
the real estate sector will continue to draw international investors.
"Pro-investor reforms and government funding of major infrastructure projects
for Expo 2020 have boosted investor confidence that is tangible in the resilient
realty sector. For investors and end users there cannot be a more ideal time to
Haider Ali Khan, CEO of Bayut, in the final quarter, Dubai's property sector
shows sustained growth, with its contribution to the GDP increasing year-on-year
according to data released by DLD.
"We have also observed record-breaking traffic on Bayut with the total views
exceeding 88.5 million in the first half of 2019. This points to a steady
interest from home buyers/investors in the Dubai property market."
Dubai Marina is the most popular area for apartment sales, while Palm Jumeirah
continues to attract the highest number of buyers and investors for villas. Most
areas have exhibited moderate declines between four to six per cent, with some
suburban neighbourhoods such as International City, Dubailand and Mudon showing
stability, said the Bayut report.
Niall McLoughlin, senior vice-president, Damac Properties, said investors in
Dubai come from a variety of social and cultural backgrounds, and their
lifestyle requirements are very diverse.
"In newer areas like Al Qudra, there is an increase in the development of large
master communities like Damac Hills and Akoya. The unique proposition of such
locations includes tranquil, peaceful surroundings, with easy access to the city
centre - and this is a key selling point for a certain section of the customer
base. However, premium areas like Business Bay and Dubai Marina are appealing to
a very different customer base who prefer the bustling city life, and proximity
to the big malls and commercial developments.
"This is why Damac also has a large portfolio of residential and hospitality
developments in these areas. As a result of market fluctuations, buyers now have
the advantage of acquiring prime property at affordable prices, and as a real
estate developer, we have a large and diverse selection of inventory for people
to take advantage of during this favourable situation," he said.
In terms of the average sales price per square foot for both apartments and
villas, the luxury area of Palm Jumeirah experienced a notable decline. For
apartment sales, the average price per square foot went down by eight per cent
from Dh1,426 to Dh1,311, while for villa sales there was a decline of 6.6% per
cent from Dh 2,358 to Dh2,201 in the third quarter of 2019. In terms of ROI,
International City maintains the highest ROI of 9.4 per cent for apartments,
while the affordable community of Jumeirah Village Circle offers rental yields
of 6.8% for villas.
Al Nahda and Dubai Marina retain their positions as the most popular areas among
potential tenants looking for apartments, and Mirdif takes the lead with those
interested in villa rentals.
Khan said Dubai Government is taking proactive steps to safeguard the interests
of investors and tenants and put forward policies to ensure value and
competitiveness in the real estate sector. "Our data shows sales interest is
also picking up in suburban neighbourhoods such as MBR City, JVC, Dubai Silicon
Oasis and Dubai Sports City. All of these contributing factors, combined with
attractive prices and payment plans, are creating healthy market conditions for
potential home buyers/investors looking to capitalise on the high rental returns
Dubai is known to offer."
He said off-plan sales are also on the rise as Dubai Land Department registered
over 2,200 deals in July alone, which was incidentally one of the highest
numbers we have seen since December 2017.