60% of the total sales in Dubai's residential market were derived from off-plan, according to property brokerage Luxhabitat
Over 1,247 villas and 5,121 apartments in Dubai were transacted in the third quarter of the year with a total volume of AED 16.9 billion ($4.6 billion), up from AED 12.1 billion ($3.29 billion) in Q2, according to new data from high-end property brokerage Luxhabitat.
According to Luxhabitat’s Q3 report, off-plan transaction volumes fell nearly 29 percent over the quarter to AED 4.5 million, part of a larger drop over the past two quarters.
However, the opening of the off-plan market in Jumeirah – in Madinat Jumeirah, Jumeira Bay and Port de La Mer among other areas – has led it to become the top selling off-plan area of Q3, with more than AED 1.3 billion in sales and over 152 units sold.
Overall, about 60 percent of the total sales in Dubai’s residential market were derived from off-plan.
“Jumeirah has traditionally been a leasehold area, complete with plots and villas, mostly owned by GCC nationals and rented by well-to-do expats,” said Luxhabitat associate director Brigitte Tenbergen.
“With the launch of freehold projects like Port de La Mer and Madinat Jumeirah Living, it holds a lot of promise for the Dubai real estate residential market to pick up.”
Tenbergen added that “there’s been an overwhelming demand for apartments in these projects. These projects also have a relatively reasonable price tag and have been a major success.”
Additionally, Luxhabitat’s analysis found that the prime residential market in Q3 2018 totalled AED 8.7 billion, 13.9 percent lower than the previous quarter.
The top three areas in terms of sales volumes were Jumeirah (AED 1.3 billion), Downtown Dubai (AED 1.2 billion) and Mohammed bin Rashid City (AED 1.06 billion).
Dubai Creek Harbour also saw a healthy sales volume of AED 655 million, slightly above the AED 662 million in transactions recorded in Dubai Marina.
In terms of rental yields, the top areas in Dubai were found to be Jumeirah Lake Towers (7.52 percent), DIFC (6.29 percent), Dubai Marina (6.22 percent), Jumeirah (5.79 percent) and Business Bay (5.72 percent).
“This quarter has seen a continued drop in rental prices throughout Dubai’s prime residential areas,” said Luxhabitat luxury rentals director Ryan Kasper. “However, landlords are using more creative means by which to maintain their rental returns and lure in tenants. This includes offering 13-month rental contracts, renovating and upgrading older properties as well as more owners furnishing and renting their properties on a short-term basis.”
“Demand for high-end luxury properties (renting on average for over AED 400,000) has been maintained and is expected to continue throughout the quarter,” he added.