We spoke to UAE real estate agents for the lowdown on property in Dubai this year – from industry insider info on prices, to hot areas and where you might be moving to in 2016.
Dan Hadi, Managing Partner, Ascot & Co
Describe the 2015 property market in five words. A complete and utter whirlwind.
Which areas and developments saw increased popularity? Arabian Ranches has always been one of the most popular areas in Dubai, but in 2015 it has probably overtaken as the number one villa community. With all a lot of the road network now complete I think people have finally overcome over their fear of the 311 and are now benefitting from an amazing community.
What did you witness in terms of increased or decreased prices? Across the established villa communities we specialise in I would say the market has softened around 15%, but the growth over the last three prior was around 30% to 40%, so the majority of people are still ahead from the original purchase price.
Where do you predict will be hot areas for 2016? From a new area standpoint, I think Mudon will continue to grow in popularity. The mall is opening soon, it’s in a great location and a lot more villas are going to be handed over soon. With the RTA pushing ahead with all the new and approved roads, I think Green Community in DIP will see a big increase in popularity once the dreaded roundabout goes later in the year. It’s by far one of the best communities in Dubai and offers great value for money.
Reports say prices will drop in 2016. Do you agree with that forecast? I can’t see the prices dropping any further than they have over the last 12 months. I think we are currently in a really healthy period where the bottom of the market has been reached and buyers have their appetite back to buy. That said, I can’t see prices going upwards either.
What would your one piece of advice be for tenants for the coming year? Buy buy buy! You will save money over the course of the year and take advantage of the dip in the market.
And what about homeowners? We are still seeing high premiums being paid for villas that are upgraded internally. For not too much money you can add some real value to your home and, if you did decide to sell, it will put you ahead of your competing neighbours.
Gareth Pierce, Director, One Real Estate
Describe the 2015 property market in five words. Slight price reductions encourages stability.
Which areas and developments saw increased popularity? The secondary areas such as Sports City, Motor City, Jumeriah Village Circle and Silicon Oasis have maintained solid transactional levels throughout 2015 as opposed to prime areas. Buyers have been seeking high yielding cheaper alternatives.
What did you witness in terms of increased or decreased prices? Prices have decreased across the board at an average of 10% to 15%.
Where do you predict will be hot areas for 2016? I see an upturn in transactional levels in the prime areas, such as Dubai Marina, Downtown Dubai and Palm Jumeriah. This is due to the yields in these prime locations becoming attractive. Rents have only received slight decreases as opposed to larger decreases in capital values, in turn improving rental yields.
Reports say prices will drop in 2016. Do you agree with that forecast? It is hard to argue against the prediction, especially for the next few months, with the current economic and political backdrop in the region at the moment. Low oil prices and political uncertainty will probably keep prices low, however attractive returns should keep the prices fairly stable.
Where is offering the most value? And where are the biggest price hikes? Some of the more recent off-plan launches have been offering low price per sqft and very attractive payment plans. Developers have also been creative with some offering guaranteed returns such as Seven Tides with Anantara and Dukes on the Palm Jumeirah. There haven’t been any major price hikes in Dubai this year.
What would your one piece of advice be for tenants for the coming year? I would say to tenants that now is a good time to buy if they have enough savings for the downpayment, and especially if they have a company housing allowance and are looking to stay in Dubai for the medium to longer term.
Gregory Lewis, Senior Negotiator, Knight Frank
Describe the 2015 property market in five words. Tough, but record deals achieved!
Which areas and developments saw increased popularity? The Palm has retained its appeal seeing the largest sale in the area complete in 2015. Emirates Hills has seen a noticeable increase in sales transactions and again saw the largest transaction in the area in 2015. Business Bay has seen higher levels also, as works have started on the new creek and the ‘Habtoor City’ opening the St Regis.
What did you witness in terms of increased or decreased prices? Prices have seen a gradual decline over the course of 2015 at approximately 10% (depending on location). However, there have been several transactions in the prime markets that have succeeded price per sqft levels. Again as stated above property sales prices have also set new records in 2015.
Where do you predict will be hot areas for 2016? I believe the super prime areas will continue to flourish given the wealth of the buyers and Meydan City given the pace of the construction and proximity to Downtown. Business Bay as stated above with Habtoor City and the creek connection. Jumeirah Golf Estates should see an increase in interest with cheaper housing and amenities to start construction.
Reports say prices will drop in 2016. Do you agree with that forecast? On the whole, yes. However, as mentioned above, some areas such as the Palm and Emirates may well not. In areas where there is a lot of supply, naturally this will see a decline. However with prices already dropping this has made it extremely attractive to investors as the returns have risen.
What is seeing the most interest from buyers; villas or apartments? Villas. Apartments tend to be for first or second buyers and investors. This may mean a mortgage is needed and given the caps this has made it difficult. Villas tend to be for families who plan to stay in Dubai for a certain period of time. This gives more motivation to purchase rather than losing money on rent.
Where is offering the most value? And where are the biggest price hikes? Best value in my eyes are areas like JVT and JVC. These areas offer great value for money and with a mall currently under construction and a large community centre now open, has added to the appeal. Also access to DWC and Dubai International Airport is easy along with plans for the metro.
Jumeirah Village Circle
What would your one piece of advice be for tenants for the coming year? If you can afford it, then look to buy. If you aim to be in Dubai for years to come, put it into a property rather than someone else’s pocket. However, make sure you are doing your research and buying at good value with good future plans for the area (malls, infrastructure etc) and these will see a rise in price in the future.
And what about homeowners? Keep hold of your property, with Expo looming, better ROI’s, cheap price per sqft (compared to other major cities) it’s a matter of time before property sales pick up in Dubai. Given recent news such as the plan for rises in stamp duty in the UK, Dubai is an extremely attractive alternative to an investor.
Harry Tregoning, Founding Partner, Tregoning & Stockwell
Describe the 2015 property market in five words. Competitive, challenging, developing, evolving, testing.
Which areas and developments saw increased popularity? Newly completed projects continue to be popular, but Umm Suqeim and Al Barsha has seen a great rise in popularity due to the proximity to schools and the effects of greater traffic.
Where do you predict will be hot areas for 2016? Again, new developments such as Arabian Ranches 2 that will be handing over will be hot. The traditionally strong areas such as Jumeriah and Umm Suqeim will continue to purr with projects like City Walk 2 really taking shape and the Canal remains on target to be completed in 2016.
The upcoming Dubai Canal
Reports say prices will drop in 2016. Do you agree with that forecast? Good villas continue to retain their value, and there is nothing to suggest that this will change. In sales prices look likely to drop a bit, although the prospect of more Iranian investment and further regional uncertainty, could play strongly into the Dubai property market’s hands.
What is seeing the most interest from buyers; villas or apartments? Apartments continue to be popular with some excellent entry price points. The villas are still popular with projects such as Mohammed Bin Rashid City enjoying strong sales on big villas off plan.
How about rentals? Rentals of villas with good quality kitchens and bathrooms are always popular along with those with good gardens. The one bed Marina flat is always the most searched for property on Dubizzle, and no doubt this demand will continue.
Where is offering the most value? And where are the biggest price hikes? Most value can still be seen in JLT. With the excellent metro station and the roads improving, along with the new parks and plenty of employment it still represents excellent value. Business Bay is an exciting area, and with the completion of the Canal it is bound to surge in popularity, so for me this is one of the most exciting areas for investment.
What would your one piece of advice be for tenants for the coming year? Keep abreast of the market and speak with your landlords before renewal. If you see some value nearby, a move could save you a good deal of money as rents are down from 15 months ago when they peaked just after the Expo announcement.
And what about homeowners? Make sure you keep your properties as attractive as possible for tenants and potential purchasers. Investors generally expect a high standard of quality and with a limited extra investment it can certainly pay big dividends.
Photos: Supplied & Getty.