Dubai’s apartment prices at a two-year low as villa sales surge
Apartment transactions are down by 5% but villa sales are up by 3%, according to Property Finder
According to a new report by Property Finder, apartment sales prices in Dubai for the first half of 2019 fell by 11.7 per cent compared to two years ago and also dropped by 3.9 per cent compared to H2 2018.
The report stated that apartments for sale also took a turn for the worse with low to mid-single-digit percentage drops across the country, compared to rentals. Apartment communities in Dubai that witnessed the biggest sales price drop in H1 2019 were Al Sufouh (-10.5 per cent), Remraam (-9.6 per cent), Downtown Dubai (-7.4 per cent), Old Town (-7.2 per cent) and Jumeirah Lakes Towers (-6.5 per cent), according to the data in Property Finder Trends report, which was released earlier this month.
Meanwhile, residential communities in Mirdif, Jumeirah Village Triangle, Dubai South, Arjan and Al Furjan stayed resilient and resisted the price drop, the report stated.
The Trends report also expressed that apartments for sale in Ras Al Khaimah had the biggest decline in prices in H1 2019, while Abu Dhabi’s prices dropped 4.4 per cent and Ajman’s prices went down by 3.9 per cent in H1. However, Sharjah apartments seemed to have held their value in H1 and have only declined 1.5 per cent in the first half of the year.
Looking at villas in Dubai and other emirates, Lynnette Abad, director of Data & Research, Property Finder said that new affordable villa communities are gaining popularity and that there has been an influx of migration to these communities from other areas such as Dubai Marina.
“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,” she added.
The Trends report further added that there have been more transactions for villas, but at lower values, mostly in the new, affordable communities targeted at the low to middle income segment. Although overall sales transactions are steady and in line with 2018, the type of properties being purchased is changing. While apartment transactions are down by 5 per cent, villa sales are up by 35 per cent.
Dubai South with 434 sales (all off-plan) had by far the most villa/townhouse transactions in H1 2019 along with Town Square which had 188 sales (128 off-plan).
Another two Emaar projects targeted at mid-upper income end-users were popular: Arabian Ranches 2 had the second most with 331 transactions, 231 of which were off-plan, and Dubai Hills Estate had 208, including 207 off-plan sales.
Richard Waind, managing director at Better Homes writing for Trends, meanwhile, commented that secondary market vendors who do not need to sell are choosing to hang onto their properties for the time being.
“We are starting to see the availability of property in the secondary market dry up as those with no pressing need to sell hold on to their assets to ride out the current price cycle. This should put a natural handbrake on future price falls,” he concluded.
