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Tenant friendly zones by Zhann Jochinke, CEO, Keller Williams Real Estate Dubai
Over the past three months we’ve witnessed a steady trend among both end users and investors in Dubai Marina and Jumeirah Lakes Towers (JLT), primarily in the one-bedroom market, with a final sales price sweet spot right around Dh1.6 million and Dh1.3 million respectively. Strength in both of these communities is somewhat to be expected as they are historically favoured by investors for their consistent yields, ease of attracting tenants and subsequent lower vacancy rates.
Also of note is a very healthy interest in International City and Dubai Land, albeit at less than half the average final sales prices of Marina and JLT. We see sales in these communities primarily to our investor base as they are currently proving to be the areas where one can still find great value in the initial purchase price as well as strong rental yields.
The past year had been somewhat uncertain and one where expectations of sellers and buyers have not always closely aligned. As some sellers stuck to their guns with asking prices that didn’t match the current value in the market a trend emerged with buyers becoming frustrated and submitting offers well under the asking price. Moving into 2016, we expect this to continue until the market as a whole settles with sellers pricing at the market and not above it.
Holiday homes by Gregory Lewis, Senior Negotiator, Dubai Residential, Knight Frank
As Dubai has continued to cement its position as a regional hub over the past decade, real estate investors have been taking notice. While Indians, GCC nationals, British and Pakistanis remain the major buyers, we have seen other previously less active nationalities increasing their share of total investment in Dubai residential property, including the Chinese.
Also anticipated to regain prominence in the industry are the Iranians as sanctions are gradually lifted over the coming years.
In recent months, Knight Frank has witnessed strong levels of enquiries in the prime segment, especially for waterfront apartments, spacious villas and penthouses — with buyers showing greatest interest in established communities such as Emirates Hills and Palm Jumeirah. Moreover, buyers are looking for properties of superior quality, which align with their global property portfolios. In our experience, demand for property is being driven by investors, end users or by those looking to buy for use as a holiday home.
Affordability by John Stevens, Managing Director, Asteco
Affordability remains a major driver for sales. Apartments in IMPZ, Discovery Gardens and Dubai Silicon Oasis (DSO) showed 3 per cent, 6 per cent and 2 per cent sales growth over the summer months — these increases can be attributed to the fact that community infrastructure is completed or nearing completion and occupancy levels have increased, therefore, making them a popular mid-market residential area. In contrast, Dubai Marina and Jumeirah Beach Residence recorded a decline of close to 10 per cent while the Palm Jumeirah recorded year-on-year reductions of 13 per cent.
Again, similar to apartments, we are seeing a tenant- friendly trend in the broader villa market. Affordability remains a priority with a high number of transactions for town houses by Nakheel and Indigo Ville in Jumeriah Village. In comparison, larger properties, including fiveand six-bedroom villas, saw minimal transactions in communities such as The Villa or Dubai Sports City, despite strong rental demand.
Lower cost units by Helen Tatham, Managing Partner, Prime Places Real Estate
In terms of purchase price, we are finding that Dh1 million- Dh3 million is the sweet spot and this is from both investors and end users. For investors, the studio, one- and two-bedroom units are by far the most popular choice to achieve high rental yields instantly and are bought even if occupied, as long as the tenant is paying the market rate. The highest-yielding areas are Dubai Sports City, JLT, JVC, DSO and IMPZ, where apartment rents are the best value.
Many end users have lived in Dubai for a couple of years and had been frustrated at paying high rents. They have saved enough for a deposit and see the sense in becoming an owner-occupier where they will see decent capital growth in their property over the next three to five years. Developers have recognised that it is not all about the luxury segment and are turning more attention towards affordability as the general cost of living rises in the UAE.
Developing areas by Zarah Evans, Managing Partner, Exclusive Links Real Estate
Among Dubai investors, real estate remains to be the most favoured asset class. Property prices are not as expensive as other worldwide hubs and potential rental incomes are sitting at their highest. Real estate is a hybrid asset with good capital appreciation. Although currently we are buying and selling in a sentiment-driven market, in Dubai investors have control over their asset and choices are available.
Apartments priced between Dh500,000 and Dh2.5 million with high yields and rental returns remain a smart investment. Developing areas such as Sports City and Jumeirah Village remain popular options in terms of affordability, growth opportunity, developing infrastructure
Apartment prices continue to drop in prime locations such as Business Bay, Downtown Dubai and Palm Jumeirah and in secondary locations such as International City, Dubai Motor City and Discovery Gardens. Newly created communities in Dubai South, Dubai Creek and Mohammad Bin Rashid City are all exciting developments of the future in Dubai.
The Dubai real estate market is currently in a correction phase and we have seen a shift in sellers’ instructions outweighing buyer enquiries, however, the number of sale transaction has remained constant. The market will continue to drive forward and upward with more product coming online, more government initiatives and regulations being put into place, higher yields and more flexibility from developers. Together
with the World Expo 2020 and the opportunities this will bring, Dubai offers a great climate and platform in which to invest.
Source: Hina Navin, Special to PW