Main Dubai Real Estate Highlights from H1, 2020

Key Highlights:

•       Dubai property prices were impacted by COVID-19 during the first half
•       Dubai Marina was the top choice to buy apartments in Dubai
•       International City recorded the best rental yields for apartments
•       Jumeirah Village Circle was the preferred community for renting apartments
•       Arabian Ranches (sales), JVC (ROI), and Mirdif (rentals) remained popular communities in terms of villas in Dubai.

The first half of the year 2020 has just culminated. It defied all expectations due to the unexpected attack of COVID-19 that jolted nearly the whole word. With the imposed lockdown and restrictions coming into the picture, it will be an understatement to say that business entities suffered a major blow. Consequently, the trends in Dubai real estate sector also took unpredictable turns. Apart from a selected few properties such as Arabian Ranches, Palm Jumeirah, and Downtown Dubai, the rest had a drop in terms of the average sales price per square foot.

Data experts at Zoom Property have studied all the trends that surfaced in the real estate market and have come up with an in-depth report of H1, 2020. It compares data of the real estate sector from the first six months of 2020 to the 2nd half of 2019 to identify common trends where consumer interest lies. Have a look at this detailed report:

Top Communities as Per Property Transactions in H1, 2020

Statistics from the Dubai REST app by DLD show that 15,897 sales transactions worth AED 32.5 billion were recorded in H1, 2020. The figures have declined as compared to H2, 2019. However, the global pandemic and the resultant restrictions imposed by the government to mitigate its risk can be cited as the reason for this decline. Having said that, the market is expected to pick up gradually again with the major restrictions being lifted towards the end of H1 and the reopening of tourism in the early H2.

Dubai Marina ranks on top among the areas where maximum real estate transactions were recorded. It registered sales worth AED 3.37B. Downtown Dubai held the 2nd spot with property transactions worth AED 2.59B. It was followed by Dubai Hills Estate, JVC, and The Villa each recording transactions valuing AED 1.52B, 1.36 B, and 1.24 B respectively. Next in the list are Palm Jumeirah (AED 1.19B), JLT (AED 623.11M) and Dubailand (419.68M). Dubailand is the only area that witnessed a significant increase in transactions. It recorded transactions worth 269.73M in H2, 2019.

Top Communities for Buying Apartments in H1, 2020

The average sale of apartments in Dubai also witnessed a decline due to COVID-19 and how it impacted consumer habits. However, among all the neighbourhoods, Dubai Marina stayed on top despite having a 2% decrease in average price per square foot. It was recorded at AED 1,277 in H2, 2019 but has come down to AED 1,242 in H1, 2020. The area features several residential buildings. However, Marina Pinnacle emerged out to be the top choice for buyers. It was followed by Horizon Tower and Marina Gate. Other notable residential buildings that were preferred by buyers in H1, 2020 were Marina Diamonds, Manchester Tower, and DEC Towers.

After Dubai Marina, Downtown Dubai ranks second in the list of top communities for buying apartments in the first half of the year. This community had an increase in average price per square foot as they jumped to AED 1830 from AED 1808. Next in the list is Palm Jumeirah that also experienced a slight increase. The average price per square foot in Palm Jumeirah raised to AED 1385 from AED 1368. Some prominent areas that were among top preferences of buyers and investors for apartments in H1, 2020 include:

•       Jumeirah Village Circle (6.1% decrease in average sales price per square foot)
•       Jumeirah Lake Tower (1.3% decrease in average sales price per square foot)
•       Business Bay (3.3% decrease in average sales price per square foot)
•       Dubai Silicon Oasis (6.4% decrease in average sales price per square foot)
•       Jumeirah Beach Residence (4.2% decrease in average sales price per square foot)
•       Dubai Sports City (1.1% decrease in average sales price per square foot)     

The increase in average sales price per square foot and rates for apartments remaining on the steady side in some communities can be attributed to the recent incentives the UAE government announced in the form of financial stimulus packages. The LTV ratio was increased to 80% from 75% ratio for first-time buyers while the sellers also showed keenness to negotiate the terms.

Top Areas for Best Rental Yields in H1, 2020

Dubai has always been a preferred destination for people looking for opportunities to invest their money in the residential property sector as the ROI is on the higher side. During the 1st half of the year, International City remained the top preference of buyers and investors alike as the area offered 9% ROI. It was followed by Dubai Silicon Oasis (8.2% ROI) and JLT (7.9% ROI).

Note: These ROIs are calculated based on the whole area. Therefore, there is a possibility of minor fluctuations in some sub-communities.

Top Areas for Renting Flats/Apartments in H1, 2020

Reports from H1 2020 indicate that JVC is the first choice for Dubai citizens when it comes to renting an apartment. It is a family-friendly community, situated at a prime location, and known for offering world-class amenities. However, due to the current market conditions, the community witnessed a decline in rental rates. The decline was recorded somewhere between 4% and 8 %. This master community is divided into different sub-communities. Among them, Seasons Community remained the primary choice for apartment renters followed by Diamond Views.

Taking the second spot among top areas for renting apartments in H1, Dubai Marina also had a slight drop below 5%. Other prominent areas for apartments for rent in Dubai include:

•       Al Nahda
•       Bur Dubai
•       Dubai Silicon Oasis
•       Dubai Sports City
•       Downtown Dubai
•       Business Bay

Top Areas for Villa Sales in H1, 2020

The year 2020 took an unexpected turn with the demand for villas rising in comparison to studio apartments, which were earlier considered to be ‘hot properties’. This change in demand was attributed to the lockdown in Dubai triggered by COVID-19. Buyers were more inclined to buy properties with a bigger area surrounded by open spaces.

Shedding light on the top areas for villas sales in the first half of 2020, Arabian Ranches stands proudly on the top spot. A well-integrated and self-contained community, Arabian Ranches had a slight increase in the average price per square foot that went up to AED 897 from AED 880. Among the numerous sub-communities it features, Al Reem was the top choice followed by Saheel, Palmera, and Mirador La Colleccion.

With average price per square foot of AED 2113, the beautiful community Palm Jumeirah remained the second preference for villa buyers in Dubai in the 1st half of the year. It witnessed a slight 1.4% drop as compared to the second half of 2019.

Other top communities for villas sales include:

•       Jumeirah Park (2.1% decrease in the average price per square foot)
•       The Villa (1.0 % decrease in the average price per square foot)
•       Dubai Hills Estate (2.4% decrease in the average price per square foot)
•       JVC (1.8% decrease in the average price per square foot)
•       Emirates Hill (7.6% decrease in the average price per square foot)

Most of these communities saw a decline in the average price per square foot. However, a couple of them including The Springs (1.3%) and Dubailand (0.2%) experienced a slight hike as well.

Top Areas in Dubai for the Highest ROI for Villas in H1, 2020

When it comes to ROI on villas, JVC attracted maximum investors and buyers in the first half. It yielded an average ROI of 6.4%. The second spot was reserved by The Springs with 6% ROI. Buyers’ favourite Arabian Ranches also made it to the list offering an average ROI of around 5.5%. Jumeirah Park and Dubailand are two other prominent communities in this list.

Top Areas for Villa Rentals in H1, 2020

Extensive research on the Dubai real estate market suggests that Mirdif was the top area for villa rentals in the 1st half of 2020. Although the average rental costs declined between 4% to 8 %, the community, due to its state of the art amenities and the premium lifestyle it offers, remained the preferred choice among renters. In Mirdif, Uptown Mirdif attracted the villa renters the most as per real estate statistics. The rental price of 3-bedroom villas in this sub-community starts from AED 75K. For 4-bedroom villas, the starting price is AED 80k.

Jumeirah took the 2nd spot in the list of top areas for villa renters for this period. The rental prices remained stable here for most of the 1st half. Top reasons why this community remained popular with villa renters include the facilities it offers, spacious and luxury villas and it’s convenient location.

Some other communities that remained in prominence with villa renters in H1, 2020 are:

•       The Springs
•       Arabian Ranches
•       Dubai Hills Estate
•       Akoya Oxygen
•       Reem
•       Umm Suqeim
•       Al Barsha

These communities experienced a decline between 2% and 9% in rental villa costs.

Top Areas for Off-Plan Properties in H1, 2020

Off-plan properties in Dubai offer great opportunities for investors. They can put their finances to good use and buy properties in upcoming developments in Dubai.

In the 1st half of 2020, Albizia in Akoya Oxygen emerged as the preferred choice among off-plan projects in Dubai. This project features villas, townhouses, and plots at budget-friendly rates with villa prices starting from AED 760K.

Apart from Albizia, Rukan in Dubailand was the second choice. This area also features luxury villas, apartments, and townhouses located in a serene and peaceful environment, away from the hustling bustling city life. Sobha Hartland in MBR and Golf Place in Dubai Hills Estate also grabbed the attention of investors looking for off-plan properties. Projects located near the World Expo 2020 site gained prominence during the 1st half.

Other off-plan projects located in the following communities also garnered interest from investors:

•       JVC
•       Downtown Dubai
•       Business Bay
•       Palm Jumeirah

The Takeaway

Although the property market in Dubai was hit hard by the global pandemic, which is evident from the declining figures, it gained momentum in the latter part of H2. The incentives offered by the government coupled with the flexibility shown by sellers also helped the property market to remain on the steady side. Furthermore, the use of advanced technology in the sector also contributed to this aspect. Using the cutting-edge technology, Zoom Property has launched 3D virtual walkthroughs of properties for sale and rent in Dubai for the buyers, investors, and renters to take virtual tours of the property from the comfort of their home. This not only alleviates the risk of spreading COVID-19 but provides ease and comfort to the interested parties.