British interest in Dubai property surges as house prices slow

According to figures from the property website Bayut.com, the more affordable area of Dubai Sports City has become the most-viewed location this year.

Property website Bayut.com found that 16.9 per cent of web users in Britain looked at properties in Dubai Sports City, above, in the year to August. Satish Kumar / The National

A slowdown in house prices in Dubai coupled with high rents and low UK yields is prompting a spike of interest among British investors in cheaper property hot spots in the emirate.

According to figures from the property website Bayut.com, the more affordable area of Dubai Sports City has become the most-viewed real estate location this year.

It found that 16.9 per cent of web users in Britain looked at properties in Dubai Sports City in the year to August – overtaking the perennial favourite Dubai Marina, which drew16.7 per cent of views.

It was followed by Downtown Dubai, which attracted 13.3 per cent of UK views, and Jumeirah Lake Towers, which drew 12.5 per cent.

Bayut said the increasing popularity of Dubai Sports City contrasted strongly with the same period a year ago, when the upmarket area of Dubai Marina was the clear favourite.

Dubai Marina attracted more than a quarter of all UK views (26.1 per cent) to Bayut’s website a year ago.

Bayut said it was unable to provide overall numbers for hits to its website.

Haider Khan, Bayut’s chief executive, said: “2015 has so far been all about affordability. Although Dubai Marina remains at the No 2 spot, affordable options such as Dubai Sports City have made their way up the ladder.”

With residential rents in Dubai remaining broadly stable this year but house prices reportedly falling, the surge in interest is likely from either prospective renters hoping to clinch a cheap rent or from investors looking to exploit increasing yields in the cheaper areas of Dubai compared with those in London.

Property brokers in Dubai estimate that yields in the cheaper areas of the city such as Sports City vary somewhere between 6 and 8 per cent. By contrast, residential yields in prime central London can be as low as 2.5 per cent.

“Broadly speaking, rents in Dubai have remained stable while prices have fallen, so yields have increased,” said Craig Plumb, JLL’s head of research in Dubai. “But for cheaper areas such as Sports City, yields will be higher than those in more established areas. And value for money is becoming more important for both renters and investors.”

When it came to views from India, Bayut said there was little change in the most popular properties. Dubai Marina again was the most popular area, attracting 22.3 per cent of traffic – compared with 25.8 per cent for the same period in the previous year.

Business Bay was the second-most popular area for Indians, the website said, attracting 19.5 per cent of hits from the subcontinent, up from 6.1 per cent the previous year.

“Just like other foreign investors, Indians also remain on the lookout for the most lucrative real estate option in Dubai, which turns out to be none other than Dubai Marina,” Bayut said.

The development of Dubai Water Canal was attracting more investors to the Business Bay area, it said.

In July, Bayut reported that sales values in Dubai dropped between 5 and 10 per cent in the first half of this year compared to the same period last year, led by a stronger US dollar, international sanctions on Russia, the oil price slump, euro-zone economic turmoil and the IMF’s less-than-promising outlook for the global economy.

It corresponds with reports from other experts. CBRE reported this month that Dubai house prices had fallen 6 per cent through July and last month from the same period a year earlier.

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