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August 30, 2019
Home prices are lower than five years ago, but hope remains that the capital growth will return in the long term
Affluent buyers will find it easiest to cut a deal for a slice of suburban life in one Dubai’s exclusive villa enclaves—where homes are trading for a fraction of what they were five years ago.
Frenzied development in Dubai over the past decade has spoiled house hunters in the city with choices—from post-modern glass apartment towers to man-made islands lined with beachfront villas—while also keeping prices low. In fact, home values in the city have been in decline since their peak in 2014, as sellers compete with a deluge of shiny new construction.
The average sales price across the city has fallen by roughly 15% over the last year alone, dragging villa prices down to their lowest point in over a decade, according to second quarter data from Cavendish Maxwell. Within the city’s affluent areas, prices have waned the most in a few planned villa communities, built like suburbs within the city, many anchored by a golf course and country-club like amenities.
There’s little expectation home values in Dubai will return to growth in the immediate future, but these deeply discounted areas offer value in the long run.
At the top of that list is Arabian Ranches, one of the biggest and oldest villa communities in Dubai, having been launched in 2004.
Its location by golf and polo clubs, as well as a few top international schools, makes Arabian Ranches popular among established expatriate families. Nevertheless, the neighborhood has experienced one of the most dramatic falls in its average home price over the past five years, according to data provided by Cavendish Maxwell, a property consulting firm.
The average villa—typically a two-story, painted-stucco mansion—now trades for around AED980 (US$265) per square foot, down nearly 32% compared to five years ago.
It’s likely house hunters will find the owners of an older villa in Arabian Ranches open to negotiating price, as they find themselves competing with newly completed houses elsewhere in the city.
“Supply remains the primary driver for price declines,” said Aditi Hariharan, a senior consultant at property consultant Cavendish Maxwell.
“Developers also continue to offer attractive payment options and promotions,” Ms. Hariharan added, which turns up the pressure on private sellers.
Jumeirah Golf Estates
The gated Jumeirah Golf Estates, which offers a similar lifestyle but at a slightly higher price point to Arabian Ranches, hosts the annual DP World Tour Championship, Dubai, held in late November. It’s also home to some 700 families and more than 1,800 villas and townhouses built overlooking man-made ponds and scenic greenways, according to the developer’s website.
Nevertheless, life at the golf community is a bargain compared to five years ago. The average sales price at Jumeirah Golf Estates has declined a little more than 30% since the 2014 market peak, and now hovers around AED1,113 per square foot, according to the data Cavendish Maxwell provided.
Prices across the so-called Emirates Living mega-development, which includes Emirates Hills and other posh enclaves like The Lakes, has collectively seen one of the greatest price drops of any luxury area over the last five years. The average home in Emirate Living trades for around AED1,143 per square foot, roughly 28% less than 2014, according to the Cavendish Maxwell data.
This article was originally published on Mansion Global.
Cavendish Maxwell is the MENA region’s leading firm of property consultants and chartered surveyors. If you are looking for professional real estate consultation or advice on property related matters, please view our services.