Dubai's Jumeirah Village Circle (JVC) district took the accolade of being the most affordable villa community for home buyers and was one of two villa developments in the emirate that saw prices rise in 2017 as the number of UAE residents opting to buy properties rose , according to a new report.
Sales prices in JVC were up 4 per cent between April and October and was among the top searches on real estate listing portal Propertyfinder. Prices for villas in JVC averaged Dh758 per square foot.
“Long-term residents are taking advantage, snapping up good deals, planting roots, and swapping their rent cheques for a mortgage,” says Lukman Hajje, the chief commercial officer of Propertyfinder Group. “Few global cities offer the opportunity to buy a well-built four bedroom free-standing villa in a prime location on a decent sized block for under US$1.2 million.”
Dubai property sales have slowed over the past year as an increasing supply of new units, a slowdown in the economy and subsequent job cuts dented demand. Developers in Dubai are expected to deliver 80,000 units by the end of 2019 and a portion of the new inventory coming to the market caters to the middle-income segment, according to a third quarter Dubai property report from broker JLL Mena.
Sales prices of villas in the third quarter of this year recorded a 1.1 per cent year-on-year fall, according to JLL, while those of apartments declined 1.6 per cent from the same period in 2016.
Propertyfinder said that the buying decision last year were influenced by increasing affordability, flexible payment plans on mortgages, and the popular belief that prices are near the bottom.
Prices in Al Barsha district -- the second area to see a price rise -- went up 0.6 per cent. It received its highest-ever number of inquiries on listings in September, as handovers rose,Propertyfinder said.
Dubai Land was the second most affordable area in Dubai to buy a villa in 2017, with prices averaging Dh845 per square foot, according to Propertyfinder. It also had one of the highest overall rates of handovers in the UAE last year, with around 2,500 units delivered to the market.
However, the villa sales prices as a whole in Dubai declined significantly between April and September, with rates at The Meadows community dropping by 9.3 per cent, Dubai Land by 8.2 per cent, Al Furjan by 8.1 per cent and Jumeirah Islands by 7.1 per cent, Propertyfinder said in a report released in December.
The portal does not expect hand over of properties to new homebuyers and mortgage-payers to slow down in 2018, but warned about deceptive payment plans.
"Far better regulation now exists to ensure that payments are linked to construction milestones and that buyer funds are held securely in escrow," said Mr Hajje. "But a few of these too good to be true payment plans may prove to be just that."
Middle-market properties were the only price category of the Dubai residential market for which online searches on UAE marketplace dubizzle.com rose this year, indicating continued growth in demand for affordable housing amid flat market conditions and increasing supply.
The searches on dubizzle.com for mid-market properties – cheaper than Dh1,000 per square foot – accounted for 66 per cent of all property searches on the platform in September 2017, up from 42 per cent in September 2016, according to dubizzle.com and property consultancy JLL's End of Year Property Report focusing on the Dubai residential market released in November.
Mid-market properties accounted for 57 per cent of all property advertisements on dubizzle.com during the month, compared to 52 per cent last September, the report added.
In stark comparison, the proportion of searches for properties in the Dh1,000-1,500/sq ft bracket dropped by 13 per cent over the year and 3 per cent for the Dh1,500-2,000/sq ft bracket, with the proportion of listings also dropping for these brackets, by 1 per cent each.