By Aneesha Rai, Content Editor, Luxhabitat
The prime-residential market in Dubai beat the overall residential market by nearly doubling in volume of sales from the fourth quarter of 2015. During the first quarter of 2016, the prime-residential market completed AED 3.2 billion in sales compared to AED 1.6 billion in the last three months of 2015, showing renewed investor confidence in the real estate market. The Dubai Marina emerged as the top-performing area with AED 578 million in sales, thus thwarting a further decline in a maturing market for specific localities. Communities considered as prime residential include Emirates Hills, Palm Jumeirah, downtown Dubai, Dubai Marina, Jumeirah Islands, Meadows, Lakes, Victory Heights, Business Bay, Jumeirah Lake Towers and Arabian Ranches. The overall residential market, on the contrary, showed a decline in sales from the previous quarter, revealing a 16-percent drop in total value of sales from AED 6.9 billion to AED 5.8 billion.
What could be attributed for the increase in prime-residential market sales is the slight decline in price points (in AED per square foot) over the last quarter by 1 percent, compared to the overall residential market, which declined by 2 percent from the last quarter. Prices in the prime-residential markets are 28 percent higher than the overall market in the first quarter of 2016.
Luxhabitat’s luxury sales director, Ian Kirkby, says that there is renewed interest amongst buyers. “The main reasons include the new accounting policies from private banking in the European countries, changes in tax laws in India and the general global economic situation. A lot more UHNWIs are finding Dubai to be a safe haven for investing their properties.”
In the prime-residential market, apartments sold three times more frequently than villas, with Dubai Marina closing AED 578 million in sales, followed by Palm Jumeirah apartment sales at AED 341 million. In the villa market, the Emirates Hills area dominated with AED 263 million in sales, followed by Palm Jumeirah at AED 237 million and The Springs & Meadows not far behind at AED 236.7 million.
Commenting on the superior performance in the Dubai Marina, Brigitte Tenbergen, Luxhabitat’s Dubai Marina luxury sales specialist, says that most of the end-user buyers give very firm, serious offers. “There is, however, a lack of good quality units in the Marina. The good quality ones are less inelastic in terms of price compared to some other building developments.”
Sally Ann Ghai, Luxhabitat’s luxury sales specialist for the Emirates Living areas that include Emirates Hills, the Springs, Meadows and Lakes, commented, “The end of 2015 saw a little bit of low-hanging fruit opportunity in the Emirates Living area, but nothing too dramatic. There has been consistent interest from buyers over the last year, but many have been too opportunistic and not genuinely motivated. This is an affluent area in a prime location, so massive value drop expectations are unrealistic. However, there has been some sustained price softening in the Lakes and Meadows, and I think the more confident, experienced buyers have seen enough price stability recently to call the bottom of the market in this area and make a measured, realistic judgment call. It’s still an end-user community, so this is a long-term decision, but I think we will start to see prices slowly gain by the end of this year and into 2017. Buyers who are waiting for further reductions may find themselves disappointed if they don’t make a move soon.”
According to the new “Millionaire migration in 2015” report published by New World Wealth, Dubai experienced an influx of 2,000 millionaires in 2015, which is a 5-percent addition to the city. In terms of swankier properties above AED 5 million, sales remain stable, if not tapering. More than 394 properties above AED 5 million were sold in the first quarter.
In 2015, the overall market showed a slowdown due to maturing of prices and increases in the overall price points. According to Sally Ann, “Following two years of world-leading price gains in 2012-2013, nearing 30 percent year-on-year, Dubai’s real estate market has demonstrated it is well on the way to recovery from the lows of 2008-2009. It would be more correct to view those 2012-2013 values in the context of approaching an already established ceiling rather than going through the roof. However, emboldened sellers then overshot on pricing by adding another 30 percent to their 2014 asking prices.”
Here’s a look at three properties that can be snatched up by qualified buyers, all listed by Luxhabitat, ranging in asking price from AED 20.5 million to AED 48 million.
In Dubai Marina, a New York-style 7,600-square-foot luxury penthouse with four bedrooms and three bathrooms is listed for AED 20.5 million. For those who prefer a villa, a 7,400-square-foot six-bedroom, six-bathroom exclusive beauty with a private pool is available in Palm Jumeirah (price not yet disclosed). Or choose to view Dubai’s most exclusive villa, located in Al Barari. With more than 19,000 square feet of living space, six bedrooms with ensuites and two additional bathrooms along with an infinity private pool, there is room and then some for any sized family. This villa is listed for a cool AED 48 million but is worth every penny.
Luxhabitat is Dubai’s only high-end real estate company focused on marketing, selling and designing the most important real estate properties in the region. The company specializes in properties above AED 5 million, and in 2014 it had an average property transaction of AED 14 million. The company is focused on sourcing the best-quality properties in premium residential areas such as Emirates Hills, Palm Jumeirah, Al Barari, Jumeirah Islands, Jumeirah Golf Estates, Meadows, Lakes and Arabian Ranches; and also the best apartments and penthouses in upscale buildings such as Le Reve, Index Tower, Six Towers, Burj Khalifa, The Address Hotels, among others. For more information, visit its award-winning website at www.luxhabitat.ae
Dubai Marina image credits: © Sebastian Tontsch