As the final quarter of the year approaches, Dubai’s property market presents good conditions for buyers, investors and renters, as per Bayut’s latest Q3 2019 market report. This is also reflected in the Dubai Land Department’s (DLD) report, which confirms that the value of real estate transactions in Dubai has grown by 12% in 2019 compared to the same period last year.

Communities such as Palm Jumeirah, Dubai Marina, Downtown Dubai and Jumeirah Village Circle are at the forefront for sales, while established areas like Al Nahda, Dubai Marina, Mirdif, Bur Dubai and Jumeirah lead the rental market.

Based on the comparison of prices from Q3 of 2019 to Q2 of 2019, there are moderate declines in average price per square foot across the board for properties on sale. However, suburban areas such as Dubai Sports City and Dubai Silicon Oasis are gaining traction with investors, and have experienced only minor price decreases. This is in line with the demand for cost-effective properties, especially from first-time buyers, who made up 66% of the total investors in the Dubai real estate market for 2018 as per DLD’s findings.

Dubai Marina is the most popular area for apartment sales, while Palm Jumeirah continues to attract the highest number of buyers and investors for villas. Most areas have exhibited moderate declines between 4 to 6%, with some suburban neighbourhoods such as International City, Dubailand and Mudon showing stability. In terms of the average sales price per square foot for both apartments and villas, the luxury area of Palm Jumeirah experienced a notable decline. For apartment sales, the average price per square foot went down by 8% from AED 1,426 to AED 1,311, while for villa sales there was a decline of 6.6% from AED 2,358 to AED 2,201 in the third quarter of 2019.

In terms of ROI, International City maintains the highest ROI of 9.4% for apartments, while the affordable community of Jumeirah Village Circle offers rental yields of 6.8% for villas.

Meanwhile, in the rental market, tenants are taking advantage of affordable prices to move to more upscale areas or upgrade to larger units in established neighbourhoods.

Overall, apartments and villas for rent in Dubai have experienced declines in average costs of between 2% – 6%.

Al Nahda and Dubai Marina retain their positions as the most popular areas among potential tenants looking for apartments, and Mirdif takes the lead with those interested in villa rentals. When it comes to rental apartments, the most significant changes are for one-bedroom units in JVC, where the average cost has dipped by 7.4%. Similarly, studios in Dubailand, Dubai Silicon Oasis, and Al Nahda have seen rents decline around the 6% mark. At the same time, two-bedroom units in budget-friendly locations such Deira have seen costs increase by a small 2.1% margin.

Tenants planning to upgrade to villas but still looking for something affordable should note that the most noticeable decline is for 3-bedroom villas in Jumeirah, where the average cost has dropped by 6.1%. However, the average rents have gone up for certain units in suburbs such as Reem, the townhouse community in Arabian Ranches, and Al Barsha by 6% and 2.9% respectively. This can be attributed to more tenants exploring the opportunity to upgrade to villas, creating an increased demand for such units. In addition to this, the popularity of emerging communities such as Mudon, Arjan and Al Furjan have elevated overall interest in these areas.

When it comes to off-plan properties in Dubai, there is a noticeable interest in areas close to the Expo 2020 site, such as Dubai South and Akoya Oxygen. Off-plan projects in high-end areas such as Palm Jumeirah, Mohammed Bin Rashid City and Dubai Hills Estate are also attracting attention with investors and potential homeowners for their affordable payment plans and lifestyle.

For further details take a look at the full Q3 2019 Dubai market report by Bayut.

Haider Ali Khan, CEO of Bayut, commented on the performance on the Dubai real estate market:

“As we’re approaching the end of 2019, Dubai’s property sector shows sustained growth, with its contribution to the GDP increasing year-on-year according to data released by DLD. Real estate transactions reached AED 106 billion in the first five months of 2019, growing by 12% from the same period in 2018. We have also observed record-breaking traffic on Bayut with the total views exceeding 88.5 million in the first half of 2019. This points to a steady interest from home buyers/investors in the Dubai property market.

“We’re also seeing the Dubai Government take proactive steps to safeguard the interests of investors and tenants and put forward policies to ensure value and competitiveness in the real estate sector. Off-plan sales are also on the rise; Dubai Land Department registered over 2,200 deals in July alone, which was incidentally one of the highest numbers we have seen since December 2017. A similar pattern of a correspondingly high number of views for off-plan properties was observed on Bayut in the same period. There were close to one million views for off-plan projects in July alone, which further reinforces the popularity of the off-plan market with buyers and investors. Our data shows sales interest is also picking up in suburban neighbourhoods such as MBR City, JVC, Dubai Silicon Oasis and Dubai Sports City. All of these contributing factors, combined with attractive prices and payment plans, are creating healthy market conditions for potential home buyers/investors looking to capitalise on the high rental returns Dubai is known to offer.”