Off-plan properties dominate Dubai’s prime real estate market
Dubai’s prime residential market has seen an uptick in sales volume, driven by the popularity of off-plan properties, according to new data from Luxhabitat.
In 2017, the price per square foot for prime residences was at AED 1,482 ($403) per square foot, comparable to the levels recorded in the fourth quarter of 2015.
Additionally, the total volume for transactions in 2017 in the secondary prime residential market was AED 13.1 billion ($3.57 billion), a 10 percent increase from the year prior. Of the transactions, 82 percent were for apartments.
According to Luxhabitat, the top performing areas in terms of transactions were Dubai Marina with AED 3.34 billion ($909 million), the Palm Jumeirah with AED 2.32 billion ($631 million) and Downtown Dubai with AED 1.54 billion ($419 million). Combined, these three areas account for 42 percent of the secondary prime residential market.
In terms of villas, the total volume of sales was AED 4.4 billion ($1.2 billion), with 50 percent of transactions coming from the Emirates Living areas, with Emirates Hills alone account for AED 816 million ($222 million) in transactions.
The total off-plan market for prime residential communities was worth AED 16 billion ($4.6 billion), of which Downtown Dubai accounted for AED 5.8 billion ($1.58 billion), Dubai Creek Harbour for AED 2.9 billion ($789 million), and Mohammed bin Rashid city for AED 2.7 billion ($735 million).
“I have experienced a strong demand in off plan- especially in the higher segment and mostly situated on the beachfront,” said Luxhabitat associate director Brigitte Tenbergen.
“Most of these developments will be handed over in 2018 or mid-2019 and all have show apartments which makes the choice very easy.
“The existing developments are getting ‘tired’ and clients are looking for modern, contemporary design and open spaces with great views and good quality,” she added.
Another Luxhabitat associate director, Sally Ann Ghai, said the forecast for 2018 looks promising due to high buyer interest and engagement.
“Sellers, having had a tough year up against the high level of off plan sales, have accepted reality and adjusted prices accordingly to signpost their serious intention to sell,” she said.
“However, buyers should not take this signal of reasonableness as an invitation to charge in with even further low ball offers on already softened prices.
“Sellers have responded to market data that the end-user market in Dubai has undertaken a permanent correction.
“Buyers should not interpret the reasonable pricing now appearing as a crash market portend, but rather a considered response to concrete sales data by reasonable sellers,” she added.