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What is selling faster in Dubai at the moment — luxury villas, premium apartments and penthouses in new super-high-end skyscrapers, or modest studios in remoted, but comfortable housing communities?
Core Savills give their own statistics in its H1 Dubai Investment Outlook report. In a year, housing prices in areas like Emirates Hills increased by 40-45% and reached an average of USD 10 million. Although imexre.com statistics too show that investment yields for these units are relatively small compared with other offers of the Dubai’s investment real estate market, yet they stayed stable at the level of 3.5-3.7% during four last years.
Dubai real market main participants have decided to stick to the golden mean, and keep their fingers on the market’s slightest pulse. Emirate’s authorities had plans to make constructors add a couple of thousand square meters of affordable housing to each new development project they start, but this initiative still is rather advisory than mandatory.
Core Savills points out that Dubai’s premium real estate market has the advantage of limited supply at the background of free construction land plots shortage in central elite areas of the city, as well as the advantage of the growing demand for such real estate units from regional investors wishing to enter the bottoming market.
Core CEO David Godchaux said: “The relative resilience of prices in most of the established ultra-prime areas is an interesting aspect coming to the fore, underpinned by limited new supply and continued demand from UHNWI investors wanting to own ultra-prime properties in Dubai’s iconic locations such as villas in Palm Jumeirah and Emirates Hills, along with a few luxury apartments in the Downtown and Marina districts and the new Jumeirah freehold developments like City Walk.”
“The trend is stemmed by the long-term investment horizons and status factors of a majority of owners of prime residential real estate in Dubai – contrasting with the many investors-speculators of pre-2008,” he added.
This latest trend of the high-end housing growing popularity arose on the basis of the stability of such investments as opposed to volatile affordable housing market, which depends on the current economic conditions, said Godchaux. He also expressed doubts about the stability of dividends from investments in affordable housing.
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