Transactions to the tune of Dh20.4 billion were carried out in Q2 of 2019.
Palm Jumeirah, Emirates Hills and Il Primo Downtown were the most expensive areas in Dubai in the second quarter of 2019.
Data by property brokerage firm Luxhabitat showed that four properties each on Palm Jumeirah and Emirates Hills were sold for Dh204.5 million and Dh185.5 million, respectively, while two properties on Emaar’s Il Primo fetched Dh105.15 million in the last quarter.
An apartment at The One, Palm Jumeirah, was the most expensive unit sold in the second-quarter at a whopping Dh74 million, followed by an Emirates Hills villa costing Dh64 million. Two units at Il Primo were the third and fourth most expensive units, sold for Dh63.412 million and Dh57.65 million.
Data from Luxhabitat revealed that overall prices fell 6.34 per cent in the first half of 2019 with most notable decline witnessed in Palm Jumeirah (-19.5 per cent), Dubai Marina (-20 per cent), Emirates Living (16.7 per cent), JBR (-12 per cent) and JLT (11.3 per cent). Al Barari and Downtown bucked the trend, recording eight per cent and five per cent rise, respectively.
“Even though we expect the real estate market to continue to decline moderately towards the end of 2019, mainly due to supply and a slowdown in the growth of the largest economic sectors, we expect a healthy demand. The market is more favourable for tenants and investors now that homes are more affordable,” said Michelle Liddiard, luxury sales specialist at Luxhabitat.
Following a range of new incentives such as long-term visa and investor-friendly regulations, Liddiard noted that many businesses are looking to test the waters before committing to long-term expansion plans.
An overall analysis of the Dubai residential market in Q2 2019 revealed that over 1,711 villas and 6,409 apartments were transacted in the overall residential market for a total volume of Dh20.4 billion. There was an increase in the volume of transactions in the secondary market to Dh13.7 billion, a 5.83 per cent increase, compared to Dh12.9 billion in Q1 2019, according to analysis by Luxhabitat based on data by Property Monitor. Contrary to this, due to fewer launches, the off-plan market saw an overall decline of 11.8 per cent from the previous quarter to Dh6.6 billion.
Nick Grassick, managing director, PH Real Estate, says sale prices contracted by around nine per cent over the first six months of the year with specific communities proving to be more resilient than others.
“Our leasing team have found homes to be slightly more affordable, reporting rental values approximately seven per cent lower now than at the beginning of the year. As homes become more affordable so they attract a greater number of buyers and tenants. This increase in volume results in a ‘flight to quality’, wherein the luxury segment of market is more desirable considering its new-found affordability. Basic economics of supply and demand suggest the luxury market, enjoying greater levels of interest, will rebound faster than those communities with fewer interested buyers,” Grassick added.
Lucy Bush, head of residential sales and leasing for Savills in Dubai, said compared to the rest of the market, prime properties in the city have witnessed a modest correction in prices on a half-yearly basis.
On a year-on-year basis, the capital value and rental value witnessed a drop of approximately 3.6 per cent and 4.1 per cent, respectively. “The trend is expected to continue in H2 2019,” she said.
Jason Hayes, CEO of luxuryproperty.com, said empirical evidence has shown an uptick in the volume of sales inquiries and a definitive uplift in the volume of transactions year-on-year, thanks to positive market sentiment in part to the government’s introduction of attractive visa programmes.
“The fundamentals of the Dubai property market in the medium to long term remain incredibly strong. The short-term prognosis for Dubai will see a period of pricing stability with a modest return to growth as we lead into the excitement of Expo 2020,” he said.