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It’s time to buy villas and townhouses in Dubai. And expats are buying in droves.
In order to cash in on the lower prices, expats and Emiratis are buying villas and townhouses in the emirate, especially in the secondary market with smaller ticket properties of up to Dh2 million in high demand.
Industry analysts say that expats who have been here in Dubai for over three years and saw the prices declining but missed opportunities are now ready to purchase. Expats are buying smaller units as safe investments and for good returns as many international investors believe that the market is at the bottom.
Due to high demand and limited availability of stock, villa/townhouses prices have proved more resilient, recovering faster than apartments.
“There has been a significant increase in expat residents who are buying villa/townhouses since the start of the Covid-19 crisis. At the beginning of the pandemic, search for villa/townhouses increased by over 400 per cent. This materialised into a
significant increase of purchases in the villa/townhouses segment from July 2020 to current,” says Lynnette Abad, director of research and data at Property Finder.
End user buyers and investors range across the board from Emiratis to Western and Asian expats, adds Abad.
Following record transactions in September and October as the economy reopened after the pandemic, January 2021 broke last year’s record as well for the highest number of secondary villa/townhouse transactions in a single month, totalling 712 units, added Abad.
The price point
Data revealed that the Dubai villa prices are currently over 30 per cent lower than 2014 peak values.
“However, the villa prices have displayed relative level of resilience with annual drops limited to five per cent during 2020, with a few prime villa sub-markets witnessing an increase in sales prices due to limited availability of stock. Overall, we are starting to see stabilisation in average villa sales prices since Q4 2020 with prices showing continued marginal upticks for the first time since 2014,” says David Abood, Partner at real estate consultancy CORE.
“The smaller ticket size villas between the price range of Dh1 to Dh2 million have seen the highest transaction activity over the past year followed by the Dh2-Dh3 million segment,” adds Abood.
According to Property Finder, prices of a secondary, or ready townhouse, start as low as Dh800,000 in the Dubailand area to as high as a custom villa for Dh75 million in Dubai Hills Estate.
“Due to the demand in villa/townhouse communities, we have seen prices steadily rise in second half of 2020 into 2021. The villas in prime, popular areas have increased the most due to high demand and lack of supply,” adds Abad.
Where are expats buying?
Data showed that transaction activity for villa and townhouse increased 39 per cent in 2020 when compared to previous year.
According to Property Finder, the most popular areas over the last six months in villa/townhouses sales transactions were Nad Al Sheba, Dubai Hills Estate, Green Community, Arabian Ranches, Town Square, The Springs and Damac Hills.
David Abood of Core says for mid-prime market villas, Dubai Hills Estate and Arabian Ranches saw the highest transaction activity, while the established villa communities of The Springs, The Meadows and The Lakes continued to display steady demand in addition to other outer areas such as Mudon, Reem and Damac Hills gaining traction.
Villas/townhouses prices
• Dh1 to Dh2 million villas in high demand
• Dh800K starting prices in secondary market
• Dh75m highest price for custom villa
Popular areas for buying villas
• Nad Al Sheba
• Dubai Hills Estate
• Green Community
• Arabian Ranches
• Town Square
• The Springs
• Damac Hills.
Source: Property Finder, CORE, KT Research
waheedabbas@khaleejtimes.com
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