Off-plan transactions remained the most popular method of buying residential property last year, accounting for 53 per cent of total deals in Dubai, a new report shows.
Some Dh14.4 billion worth of off-plan properties were bought from a total of Dh27.2bn residential deals, according to an annual report published by listings portals Bayut and Dubizzle. Ready property deals were worth Dh12.8bn in 2020, the report said, citing Dubai Land Department data.
Popular communities in Dubai reported price declines between 2 per cent and 10 per cent, while rents reduced between 9 per cent and 17 per cent in 2020. The sales and rental price reductions remained in line with the patterns observed in 2018 and 2019, the report said.
“2020 has been an exceptionally challenging and uncertain year for the real estate fraternity and the world at large,” Haider Ali Khan, Mena head of the listing sites' parent company Emerging Markets Property Group, said.
“However, we’ve seen interest in the Dubai real estate sector remain consistently high. Dubai has been able to stay resilient, in large part due to timely measures from the government, including the stimulus plans and deferred payments for off-plan buyers.”
The property market in the UAE slowed in the wake of a three-year oil price slump that began in 2014. Prices have since remained under pressure due to oversupply concerns. The coronavirus-induced economic slowdown further pressured the market in 2020.
JLL forecasts 53,000 homes are due for handover this year, a 9 per cent increase on the total stock of 595,000 at the end of last year.
Dubai Marina remained the most popular for luxury apartment sales in 2020, recording 526 transactions in the past six months, the report said.
Other communities such as Palm Jumeirah, Jumeirah Beach Residence, Downtown Dubai and DIFC were also popular with high-net-worth buyers and investors and recorded minor price declines between 3 per cent and 10 per cent, the Bayut and dubizzle report said.
Meanwhile, Jumeirah Village Circle garnered most interest from buyers for affordable apartments, recording 332 sale transactions over the past six months. Other affordable apartment communities in demand were Jumeirah Lakes Towers, Dubai Silicon Oasis, Business Bay and International City, which registered price declines between 7 per cent and just under 13 per cent.
International City now offers investors the highest yields, with apartments in the community averaging returns of 8.5 per cent. Dubai Marina apartments yield about 6.2 per cent, the report said.
Luxury villa sales were most prominent in communities by well-known developers such as Arabian Ranches, the Palm Jumeirah, Dubai Hills Estate and Jumeirah Park. Those looking for affordable villas focused on suburban localities such as Dubailand, the report added. Villa yields were highest in Jumeirah Village Circle at 5.9 per cent, with Arabian Ranches units yielding 5.5 per cent.
In the rental market, apartments in JVC were the most in demand among budget-conscious tenants last year. Rents for apartments in JVC experienced moderate declines between 10 per cent and 17 per cent.
Meanwhile, tenants searching for affordable homes also showed interest in older neighbourhoods such as Bur Dubai, Al Nahda and Deira, where rents have seen declines of about 13 per cent, the report said.
On the other end of the spectrum, Dubai Marina was the first choice for luxury apartment rentals in 2020. Other premium apartment communities such as Palm Jumeirah, JBR and DIFC recorded rent declines of about 17 per cent last year.
Jumeirah was the first choice for tenants looking for upscale villas last year, followed by Arabian Ranches, while suburban neighbourhoods were popular for affordable villas. Mirdif was the most searched by tenants on a smaller budget. Other suburbs such as Akoya Oxygen, JVC and Reem were also popular among budget-conscious tenants.
____________
Property of the week: A Dh38.5 million Jumeirah Golf Estates mansion
