Villa sales rise in Dubai as cheaper stock comes onto the market
New off-plan offerings in Dubai South, Dubailand and Town Square gain in popularity with buyers
Villa prices are falling in Dubai as newer, more affordable stock comes onto the market, according to real estate listings portal Property Finder.
Villas are 12.1 per cent cheaper than they were in 2017 and and 4.3 per cent more affordable than in the second half of last year, falling to an advertised median price of Dh855 per square foot. As a result, villa transactions rose 35 per cent in the first half of this year compared to last year, the report said.
New, affordable off-plan offerings in Dubai South, Dubailand and Town Square were popular with buyers, according to Property Finder.
“As new affordable villa communities are getting completed and handed over, we have seen a migration to these communities from popular areas such as Dubai Marina,” said Lynnette Abad, director of data and research at Property Finder.
“Families are choosing to live a little further out in the suburban areas of Dubai in order to gain access to a larger property with outside space. We have also seen a large influx of renters converting to home buyers, especially in these new villa communities.”
Villa communities in Dubai where sales prices declined most in the first half of 2019 were Damac Hills at 8.2 per cent, Emirates Hills, 6.6 per cent, Green Community Motor City, 5.4 per cent and Dubai Silicon Oasis, down by 5.2 per cent. Al Furjan and The Villa prices were 5.1 per cent lower.
Communities such as Living Legends, District One in Mohammed Bin Rashid City, Mirdif, Green Community DIP and Palm Jumeirah Signature Villas recorded zero or a very marginal drop in villa sales prices.
In terms of transactions, Dubai South with 434 sales (all off-plan) had by far the most villa and townhouse transactions in the first half of 2019. Two Emaar projects targeted at mid-upper income end-users were also popular, with Arabian Ranches 2 recording 331 transactions, 231 of which were off-plan, and Dubai Hills Estate 208, all but one of which were off-plan sales. Villa sales at Town Square came in at 188, with 128 off-plan sales.
“For villas, there have been more transactions but at lower values, mostly in the new, affordable communities targeted at the low- to middle-income segment,” the report said.
Meanwhile, some of the higher value, older luxury villa communities have not performed as well, given the availability of newer, cheaper villas.
“Vendors marketing unrenovated, poorly-maintained prime located properties in the Palm Jumeirah or Emirates Living communities are at the mercy of the market and some have seen significant losses,” the report said.
Property Finder also said Ajman’s villa prices were more or less flat, easing down just 0.6 per cent compared to the second half of 2018. Sharjah prices declined 1.6 per cent, while Ras Al Khaimah villas experienced a more significant drop of 5.9 per cent. Abu Dhabi bucked the national downward trend, however, with a 1.5 per cent increase to a median advertised villa price of Dh827 per square foot.
Apartment sale transactions are down 5 per cent in Dubai despite prices dropping 11.7 per cent over the past two years and 3.9 per cent compared to the last half of 2018. For Dubai apartments, the median advertised price is Dh1,163 per square foot.
Apartment communities in Dubai that witnessed the biggest sales price decline in the first half of 2019 were Al Sufouh at 10.5 per cent, Remraam at 9.6 per cent, Downtown Dubai at 7.4 percent, Old Town at 7.2 per cent and Jumeirah Lakes Towers, which slipped 6.5 per cent.
Apartment prices at Mirdif, Jumeirah Village Triangle, Dubai South, Arjan and Al Furjan were unchanged in the period.
“Dubai apartments remain the preferred property type and, although their year-on-year transaction numbers have declined, the value has increased. This is reflective of an end-user driven market," Property Finder said.
“End-users tend to buy larger apartments and those in prime locations, while studios and one-bed apartments that offer higher yields are preferred by investors.”
Downtown Dubai saw the most apartment sales in the first half 2019 at 1,586, of which 1,288 were off-plan transactions. Dubai Hills Estate and The Lagoons in Dubai Creek Harbour - both of which are Emaar developments - were also popular, the report found.
Updated: August 20, 2019 01:48 PM