Demand in segment seen to continue to outweigh larger properties
The affordable housing segment is experiencing the strongest demand in Dubai as properties priced below Dh1.5 million dominated transactions in the emirate's real estate market during the first nine months of 2019, latest data shows.
Low-cost properties or affordable housing units' sales registered 10.87 per cent year-on-year growth during the January-September period this year as Dubai recorded 18,858 transactions for properties worth up to Dh1.5 million, compared to 17,009 deals in the same period last year, Property Finder Group's report says.
Analysts said sales and leasing demand for affordable units will continue to outweigh larger properties in Dubai due to a growing young population, higher percentage of bachelors and small families, and greater yields offered to investors.
Experts said a correction in prices is steadily making Dubai property more affordable to investors and end-users. Dubai realty has emerged as a mature and affordable market after shedding almost 25 per cent of its value in the past five years, they added.
"Affordable end-user housing demand is still high and is expected to continue to be the case for many years to come," Haider Tuaima, head of real estate research at ValuStrat, told Khaleej Times. "Our research has found that current prices reached previous low levels of 2012, which in turn is prompting many households to consider and/or move to Dubai from the Northern Emirates," he said.
Data Finder's statistics showed that 6,888 transactions were registered in Dubai for properties valued between Dh1.5 million to Dh3 million during the first nine months of 2019, while properties valued between Dh3 million to Dh5 million recorded 2,196 transaction during the period. It further noted that 726 deals for properties valued between Dh5 million to Dh10 million and 520 transactions for properties worth more than Dh10 million.
John Stevens, managing director at Asteco Property Management, said properties in Dubai have become more affordable in the global context due to availability of 'unlimited land' for development compared to very saturated and restricted markets of London and Hong Kong, among others.
"Affordability is not only measured in terms of the price, but also in regards to payment terms. Developers have shifted their focus to the price and flexible payment plan due to global/regional headwinds and the general squeeze in purchasing power," he said, adding that this trend is not expected to change in the short- to medium-term period.
Farhad Azizi, CEO of Azizi Developments, said the affordable housing segment is experiencing the strongest demand - significantly more than luxury properties.
"Expo 2020 reinforces demand for affordable units, as it solidifies Dubai's standing as a global hub for business and tourism and sets strong fundamentals for long-term growth across a multitude of industries, including real estate," Azizi told Khaleej Times. "This world-class event, and especially its after-effects, will result in an increased number of visitors, business relationships being formed and infrastructure investments being driven, propelling the vision of Dubai's visionary leadership."
"With the emirate retaining a large number of visitors and jobs being created, the event boosts demand. The affordable segment benefits from this the most, as new residents tend to prefer value-for-money units as their initial homes," he said.
