Recently, Dubai’s luxury property market has been more resilient in comparison to other top cities in the world. Actually, there are several reasons for this. Firstly, the market in Dubai witnessed increased transactions owing to steady decline in prices. Consequently, they became more affordable than in the past. Secondly, developers are less interested in high-end areas. In fact, they are more focused on cheaper locations leading to less prices for properties.
It is interesting to note that the demand for established areas of Dubai is on the rise. However, they were previously believed to be expensive. These areas include Palm Jumeirah, Downtown Dubai, and Emirates Hills.
According to Property Finder, the number of transactions of properties worth Dh10 million or higher showed upsurge in the H1 of 2019. To be more precise, there were 194 deals in the first half of 2019, while this figure for last year was 115. The figures show a 60 percent upsurge in established areas. Palm Jumeirah was the most popular location with 16 deals for apartments and 24 deals for villas.
Also, it should be said that majority of buyers were interested in buying apartments in Opera District of Downtown Dubai.
Besides, the most popular project in the luxury segment has been Emaar’s II Primo tower in the Opera District. In fact, this project of Emaar has seen the strongest sale among other luxury properties.
The second popular location has been District One of MBR City. Actually, This location has seen 16 deals.
In the secondary luxury sales market, there has been buyer interest for Sienna Lakes villas in Jumeirah Golf Estates. Also, there were some projects that buyers were strongly interested in. Some of them include Al Barari villas, Bulgari Resort & Residences, Dubai Creek Harbour, apartments in Volante Tower in Business Bay and Le Reve in Dubai Marina.
Lynnette Abad, director of data and research at Property Finder, has said that luxury properties were prohibitively expensive before. Over the last year, the prices showed a decline. Therefore, luxury properties became more attractive to investors, especially foreign ones. This is the reason why investments in this market increased.
Property brokerage firm Luxhabitat revealed date showing that four properties each on Emirates Hills and Palm Jumeirah were sold for Dh185.5 million and Dh204.5 million, respectively. However, two properties on Emaar’s II Primo were sold for Dh105.15 million in the last quarter.
Total luxury property prices decreased by 6.34 percent in the first half of 2019. The most prominent decline witnessed in Dubai Marina (-20 percent), Palm Jumeirah (-19.5 percent), Emirates Living (16.7 percent), JBR (-12 percent) and JLT (11.3 percent). However, Al Barari and Downtown showed an opposite trend recording rises of 8 percent and 5 percent, respectively.
It is interesting that the decline in property prices has been steady since 2014. This subject has made the luxury properties of Dubai more affordable than cities like London, New York, Paris, and Singapore.
Farhad Azizi, chief executive of Azizi Developments, said that developers have been recently less focused on luxury projects. Moreover, the supply in high-end segments has decreased. That results in the rise in deals.
Azizi also added that most of the buyers in the luxury property market of Dubai are local and GCC including Bahrain, Saudi Arabia, and Kuwait. As many developers have stopped developing luxury units, the supply in the market has declined. So, there is a growing demand for high-end units now. Actually, there is a problem of supply and demand.
According to the above, the luxury properties of Dubai are more affordable than any time in the past. As well as this, the prices are much less than other top cities like London and Singapore.
*The information above was based on Khaleej Times website.
*Written by: Maral Aryanpour