In 2018, Dubai has seen a whirlwind of announcements such as the retirement visa, company ownership and 10-year residency, that are predicted to change the paradigm of the real estate market in the city. With these newly announced laws and handover of major off-plan properties in preparation for the Expo 2020, the Dubai real estate market is now as robust as ever providing investors with a favourable environment for investing. With that being said, as 2018 comes to a close, it’s now time to analyse how the real estate market in the city has fared, to get you an insight on the property price trends of Dubai in 2018.
For this year’s annual real estate report for Dubai, we have compared prices seen in our H1 market report for 2018, to help you get an idea of how the property tends have transitioned in the past six months.
Dubai Marina remains on top for buying apartments in Dubai
With a prime location and stunning apartments with waterfront views, we have seen the neighbourhood of Dubai Marina remain a constant favourite for both buyers and renters in H1 and Q3. This time too, predictably, the apartments for sale in Dubai Marina are the most searched for buying apartments in Dubai, by Bayut.com users. When it comes to the sale prices for apartments in Dubai Marina, they have remained more or less stable compared to those seen in H1, with average prices standing at AED 850k for studios, AED 1.19M for 1-bed and AED 1.95M for 2-beds. Within Dubai Marina, the luxurious Marina Diamonds was the most searched building in the area accounting for 21% of searches.
Coming in second for buying apartments we have the iconic neighbourhood of Downtown Dubai, which is the only area on this list where prices remained mostly unchanged at AED 1.03M for studios, 1.6M for 1-beds and 2.95M for 2-beds.
Following Downtown Dubai, International City came in third and is the only area with significant price changes for buying flats in Dubai. The studios in International City saw 12.9% decrease and the average prices dropped down to AED 270k from AED 310k in H1. 1 and 2-bedroom units in International City also experienced a decrease and prices are now at AED 385k from AED 420k, and AED 710k from AED 770k, respectively.
Other popular areas for renting apartments in Dubai include Jumeirah Lake Towers (JLT), Jumeirah Village Circle (JVC), Palm Jumeirah, Dubai Silicon Oasis, Business Bay, Dubai Sports City and Jumeirah Beach Residence (JBR). All these areas showed a 2-9% decline in average sales prices with only certain areas experiencing marginal increases which suggest a possibility of the market bottoming out in 2019.
international City has the highest ROI for apartments in Dubai
From our top five most popular areas for apartments, International City offers the highest high return on investment (ROI) of 9.3% for those looking at buying properties in Dubai for the purpose of renting it out. This is followed by the apartments in JLT, that have an average rental yield of 7.5%. Other areas in the Dubai property market that have good ROI for apartments include JVC (7.3%), Dubai Marina (6.4%) and Downtown Dubai (5.4%).
Arabian Ranches remains the firm favouritE for buying villas in Dubai
Arabian Ranches which is known to be one of the best residential neighbourhoods in Dubai has once again taken the first place for buying villas. The average prices for the villas in Arabian Ranches saw a 6-7% decrease, with prices averaging at AED 2.8M from AED 3.05M for 3-beds, AED 3.8M from AED 4.1 for 4-beds and AED 4.79M from AED 5.2 for 5-beds.
The luxurious island destination of Palm Jumeirah and new development of Dubailand take the next top spots for buying villas in Dubai. Both areas have experienced a decrease in prices with the most noticeable price changes being for 4 and 5-bedroom villas in Dubailand, where the average sales price decreased to AED 2.12M from AED 2.45M, and AED 2.28M from AED 3.5M, respectively. The price changes in Dubailand can be attributed to the delivery of a lot of newly finished off-plan projects. As for the villas for sale in Palm Jumeirah, prices for 4-bedroom units average at AED 10.4M and prices for 5-beds are at AED 16M.
Overall the property prices for villas in Dubai veered towards a decline within 5%, with the only significant change being a 12.1% decrease for 5-beds in DAMAC Hills (Akoya by DAMAC) where the prices went down from AED 5.17M to AED 4.54M. As for the lowest decreases, the prices for 3 and 4-bed villas in The Springs remain unchanged at AED 2.4M and 2.9M respectively. The 5-bed villas in JVC also remained unchanged at AED 4M.
The luxury villa community of Emirates Hills, which is part of the larger Emirates Living development that is developed by Emaar, is known for having larger villas that range from 6-bedrooms to 9-bedroom units. According to our data, 6-bedroom were the most popular and prices average at AED 35M.
The Villa, The Meadows, Arabian Ranches 2, JVC are other popular areas that made it to the list of best areas to buy houses in Dubai.
The springs villas have ranked on top ROI in Dubai
When it comes to ROI for villas in Dubai, the high rental yields of 6.3% for houses in The Springs makes it the best place for investors looking to buy villas in the city. The next popular areas to cash on those high rental yields in Dubai’s for villas are Dubailand(6.1%), Arabian Ranches(5.8%), The Villa(4.5%) and Palm Jumeirah(3.1%).
Al Nahda Pushes Dubai marina to second place and takes the crown for renting apartments in Dubai
Breaking the trend we saw throughout 2018, this time the established neighbourhood of Al Nahda takes the top spot as the most popular area for apartment rentals in Dubai, pushing Dubai Marina, our usual winner marginally into second place. The 1-BHK flats in Al Nahda saw the steepest decline of 10.4% with prices averaging at AED 34k from AED 48k, 2-bedroom averaged at AED 58k from AED 60k and studios are at AED 35k from AED 38k. The Al Nadha 2 sub-community received the highest number of searches within Al Nahda.
The favoured Dubai Marina came in at a close second after a tough competition with Al Nahda and the change in position can possibly be credited to the increased interest for investment in the area after the introduction of the new laws, which have encouraged people to consider buying and living in Dubai Marina rather than leasing. This is further evidenced by the fact that sales searches in Dubai Marina have gone up and it was, and still is number 1 when it comes to investing in an apartment in H2 2018. In Dubai Marina, the rent prices for studios, 1 and 2-bedroom flats decreased on average and are now at AED 55k, AED 80k and AED 120k respectively.
The budget-friendly area of Deira takes the third spot for flats in Dubai where the prices fell marginally and are now at AED 32k for studios, AED 57k for 1 BHK and AED 88k for 2BHK.
The other popular areas to rent flats in Dubai include Bur Dubai, International City, Dubai Silicon Oasis, JVC, JLT, Dubai Sports City and Downtown Dubai. In these areas, prices for studios in JVC and Deira remain more or less stable at AED 39k and AED 32k respectively. The only significant changes were decreases for studios in International City, Dubai Silicon Oasis and Dubai Sports City by 10%.
Mirdif is the most popular area to rent villas in the Dubai property market
While evaluating real estate trends in Dubai in 2018 for villas, the residential villa community of Mirdif remains the most popular for renting houses in Dubai. In terms of prices, Mirdif looks rather stable with prices for 4-beds remaining unchanged at AED 130k and prices for 5-beds averaging at AED 140k. The 3-bedroom villas in Mirdif have experienced a marginal 4.3% increase with average rent prices going up from AED 115k to AED 120k.
The next spot for renting villas in Dubai is taken by the houses in Jumeirah which had the steepest fall in rents for 3 and 4-bedroom houses. The prices for these units went down to AED 165k from AED 180k for 3-beds and AED 190k from AED 210k and AED 4-beds. The rents for 5-bed villas in Jumeirah also went down and now average at AED 250k from AED 270k.
Arabian Ranches, The Springs, Al Barsha, Umm Suqeim, Palm Jumeirah, Dubailand, JVC, and Jumeirah Park are the other popular areas for renting houses in the Dubai real estate market in 2018.
top Off-plan projects in the Dubai Real Estate Market
With Expo 2020 drawing closer and the new laws coming into effect, there has been a high interest by property investors to buy off-plan property in Dubai. This year, the off-plan development of Mohammed Bin Rashid City (MBR City) was the most popular for investors looking at investing in the off-plan property sector of Dubai. Dubbed as the ‘New Downtown’ of Dubai’ the mixed-use development has been garnering a lot of interest with some units being handed over in the first few months of 2019. Within MBR City, District 7 by Meydan is the most popular off-plan community. We have gathered detailed information on investing in MBR City for investors looking for great property deals with high ROI in Dubai with the help of our extensive data.
The other popular areas includ Akoya Oxygen, JVC, Business Bay and JLT. Within these areas, Sahara Villas in Akoya Oxygen, Orchidea Residence in JVC, Bayz By Danube in Business Bay and Wind Towers in JLT are some of the notable off-plan communities to invest in Dubai.
In conclusion, the Dubai real estate market remains to be favourable for both buyers and renters. Barring a few significant changes, all the prices changes have been below the 10% mark suggesting the possibility of the Dubai property market stabilising in 2019.
Forecast for 2019
Haider Ali Khan, CEO of Bayut, said: “Dubai has followed a similar trend as seen in our H1 and Q3 Market Report, with property prices falling across its most popular areas. This year has definitely been a big one for the Dubai property market due to announcements of the new retirement visa along with the 10-year residency visa and 100% foreign company ownership. The new reforms are expected to boost the sales of properties in 2019 and heralds the possibility of prices stabilising across the emirate which will further strengthen the position of Dubai as one of the leading emirates to invest in.”
Disclaimer: The above report is based on prices advertised by real estate agencies on behalf of their clients on Bayut.com, and not representative of actual real estate transactions conducted in Dubai.