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Living in the land of dreams, the UAE, seems to come with a price tag, especially when residing in villas. However, the third quarter of last year seemed to have subdued growth levels of villa sale prices and rents in Dubai. This could be due to the new mortgage cap rules and new family homes being constructed across the metropolis.
According to the Jones Lang LaSalle report on Dubai's realty sector, the average rental and sale prices of villas grew by just 1% in Q3 (down from 6% in Q2). This is a sign of price correction – affordability constraints are making a malleable ceiling. Nevertheless, the RERA rent index shows a diverse sentiment for villa communities. For example, Al Furjan community's rents increased by 7.3% and 20% for four-bedroom and five-bedroom villas, respectively, while Palm Jumeirah's and The Springs' have decreased.
The market and rental prices of villas depend on the property size, sub-locality, amenities and other factors. The sale prices of four-bedroom villas in Al Furjan are between Dh3 and Dh5.6 million while five-bedroom units are priced between Dh4.5 and Dh7 million. In contrast, the sale prices of four-bedroom villas in Palm Jumeirah vary from Dh5.8 to Dh19 million; five-bedroom units range from Dh8.5 to Dh65 million, higher compared to Al Furjan. The sale prices of four-bedroom villas in Arabian Ranches are from Dh341,000 to Dh9.5 million; five-bedroom homes cost between Dh4.1 and Dh22 million. In The Springs community, prices of four-bedroom villas range from Dh2.8 to Dh4.9 million; five-bedroom houses go up from Dh3.9 million. On the contrary, sale prices in The Meadows range from Dh4 to Dh12 million for four-bedroom villas and between Dh5.5 and Dh16 million for five-bedroom units.
Annual rents in the Al Furjan community start from Dh240,000 for four-bedroom homes and between Dh200,000 and Dh300,000 for five-bedroom units, while Palm Jumeirah's four-bedroom villa can be rented from Dh355,000 to Dh700,000, and from Dh400,000 to Dh1.5 million for five-bedroom homes. In Arabian Ranches, annual rents for four and five-bedroom villas range from Dh180,000 to Dh550,000 and Dh268,000 to Dh550,000, respectively. In The Meadows, annual rents for four and five-bedroom villas are from Dh225,000 to Dh425,000 and Dh250,000 to Dh600,000, respectively. In The Springs, rents for four-bedrooms are from Dh185,000 to Dh275,000, the lowest among all.
• Dubai villa sale and rental rates showed subdued growth levels in Q3 2014
• This could be due to the new mortgage cap and several new developments
• The Springs has the lowest annual villa rental rates among other communities
Source: Arva Shikari, Special to Properties
The writer is a freelancer