Dubai renters look to the suburbs for good deals and more space

Renters looking for good value accommodation and more space in Dubai have been searching in older neighbourhoods and suburbs of the emirate.

A residential report by portal Bayut and dubizzle found a surge in rental demand for homes in areas including Jumeirah Village Circle, Dubailand and Akoya Oxygen, driven by increasing demand for larger living spaces and convenient access to recreational amenities.

Other communities, such as Jumeirah Lake Towers, Dubai Silicon Oasis, The Springs and Mudon sparked interest in new buyers, according to the sales analysis of the first quarter of 2021.

The report said renters interested in luxury properties have continued to favour historically popular areas, including Dubai Marina, Downtown Dubai, Jumeirah and Al Barsha.

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"This year has really started off on a good note for the Dubai real estate market," said Haider Ali Khan, chief executive of Bayut and dubizzle.

“In the first quarter of 2021, we have seen an impressive growth in demand; prices have increased in most of the key areas and the volume of transactions have also gone up.”

Affordable apartments

The report found areas with affordable apartments and villas saw a steady price-per-square-footage in sales, recording increases of up to 5 per cent.

And after a fall in prices during the pandemic, Dubai's more luxurious neighbourhoods continue to recover, recording increases in prices of between 5 and 10 per cent overall.

Lower down payments, favourable mortgage rates, attractive prices and increasing demand for more living space as people continue to work from home contributed to the spike, analysts said.

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Damac Hills offers a gross yield of more than 6 per cent. Photo: Pawan Singh / The National

Dubai Marina has continued to generate the most interest from buyers and investors, thanks to quality properties, waterfront views and close proximity to tourist attractions.

The average price-per-square-foot to buy apartments in Dubai Marina has increased by 5.62 per cent so far in 2021, from Dh1,152 ($313) to Dh1,217.

Popular communities of Downtown Dubai, Business Bay and Palm Jumeirah also recorded up to an 8 per cent upwards climb in sales-price-per-square-foot.

Dubai appears to be strengthening its appeal for property investors.

Of those entering the property market in January and February, 62 per cent were new investors according to the Dubai Land Department.

“Some of the sales prices for popular areas in Dubai are the highest we have seen in the market since 2014,” said Mr Khan.

“It is a good measure of the confidence that property seekers currently have in Dubai’s real estate market.”

Top neighbourhood trends in 2021

Jumeirah Village Circle, Dubai Marina and Downtown Dubai all offer plenty of attractions, easy access and family-friendly amenities.

The long-established communities continue to ride high in the list of investors and renters.

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The Ranches has an abundance of facilities from tennis, basketball courts and playgrounds. Antonie Robertson / The National

Up-and-coming areas, such as Dubailand and Dubai Hills Estate – where a huge mall is due to open later this year – are also attracting a lot of interest in off-plan and completed homes.

Other sought-after areas for buyers so far in 2021 have been the established communities of Palm Jumeirah, Arabian Ranches, Jumeirah Lake Towers, Business Bay and Dubai Sports City.

Apartments for sale in International City proved the best option for investors looking for high rental returns, so far this year.

Analysis of Dubai property prices revealed that flats in International City offered an average return on investment of 7.61 per cent, based on projected rental yields.

So far in 2021, land department figures revealed 6,328 new residential transactions totalling Dh8.9 billion.