Despite the fact that luxury segment of the Dubai's real estate market has generally been under pressure of low demand recently, upscale property units were not affected by a decrease in prices because of their "niche" status and exclusivity. But it seems that the decline in prices has finally reached upper priced apartments in Dubai.
According to Cluttons, in the last nine months prices for apartments in the elite areas of Dubai such as Dubai Marina and Palm Jumeirah dipped by 3 and 2.5%, respectively.
“In London’s prime core, the average price of an apartment stands at Dh4.9 million, which equates to between Dh4,500 and Dh7,400 per square foot (psf). The average value of residential property in Dubai stood at Dh1,441 psf at the end of the third quarter of 2015, with the Burj Khalifa (Dh3,700 psf) being among the city’s most expensive schemes,” says the report by Cluttons.
And these days, a 5,500 square foot four-bedroom Garden Home villa on the Palm was put on sale for Dh11.4 million, while it would only come up with a “two- or three- bedroom flat in Chelsea, which would be roughly a third of the size”.
Other Dubai areas with luxury property units, too have shown a decline in prices this year, says Cluttons. Prices for villas dipped the most in Victory Heights (8%), The Springs (7%) and in some communities on the Palm (6%). And some of the villas in the Garden Homes on the Palm Jumeirah even saw a decline by 15%.
At the same time, Cluttons experts noted that such a situation in the Dubai real estate market won’t last for a long. Due to lifting sanctions of Iran, high networth Iranian buyers, who have been effectively locked out of global investment opportunities for nearly a decade, could come into global and local UAE real estate markets in the near future.