Dubai's luxury housing market offers the best return on investments
Due to decrease in prices for Dubai premium housing over five years, buying real estate in this category today has become truly lucrative. Especially, at the background of prime property prices in other major global cities.
If you are planning to buy luxury residential property in Dubai, the best time to make the best deal is now. According to the Savill’s World Cities Prime Residential Index issued for the first half of 2019, Dubai luxury real estate prices have declined by 20 per cent over the last five years, primarily due to the large influx of new residential units and offers, making the emirate the third most affordable city in this rating.
According to Luxury Property, prices for premium villas on the man-made island of Palm Jumeirah have decreased by 17% — from AED28,655 (USD7,801) per square meter in 2014 to AED23,702 (USD 6,466) this year, while apartments prices on the island decreased at the same rate, from AED20,736 (USD 5,645) per square meter in 2014 to AED17,154 (USD4,670) per sq. m this year.
Speaking about locations, Emirates Hills and Dubai Marina experienced the biggest decrease in luxury property prices over the same period — from AED28,095 (USD7,649) per square meter in 2014 to AED20,154 (USD5,487) in the Emirates Hills, and from AED19,223 (USD5, 233) to AED13,774 (USD3,750) per square meter in Dubai Marina.
And both, when comparing Dubai with other global major cities, it’s noteworthy thatluxury home buyers over other world’s centres will also have to pay a high property tax, incur large maintenance costs and various types of fees, which create a negative capitalization rate for the purchased housing. In Dubai, the annual rental income, even for luxury real estate, is enough to cover all the costs for maintenance, utilities and leave the owners to reap solid net profit.
According to Luxhabitat’s data for the last quarter, Dubai prime housing market has grown by 3.24 per cent and reached AED10.6 billion in monetary terms. And as for sales, in the last quarter, the largest growth in transaction volume was observed in areas such as Arabian Ranches 1, Jumeirah Golf Estatesand Downtown Dubai— up to 45.5 per cent, 42.14 per cent and 40.49 per cent, respectively.
“Although we expect the Dubai’s real estate market to experience a further moderate decline before the end of 2019, we still await for the healthy demand for luxury housing,” said Michelle Liddiard, luxury real estate sales specialist at Luxhabitat.
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