41% of property transactions below AED 1m

Nearly 41 per cent of the total 37,788 residential transactions in Dubai last year were below Dh1 million ($272,213), said a new report.

An increase in sale of properties valued under Dh 1m marks a major shift in the market, which has traditionally seen buying activity focus on luxury units,

This is a big shift for the Dubai market, which has traditionally seen buying activity focused on the luxury segment. Most sales in the sub Dh1 million market usually involve studios and one-bed apartments, according to Data Finder, the real estate data and insights platform under the Property Finder Group.

A total of 15,516 transactions were registered for residential properties priced below Dh1 million last year, it added.

Many first-time homebuyers often consider a property priced below Dh1 million and Dubai has a range of units available in that price range today, said the Property Finder Group in its report.

Investors can also pick up good deals for rental investment for this price. Entry prices and down payments at this level are far more affordable, and yields can still reach 8 percent to 10 percent for the right deal, it added.

“In H2 of last year, we started to see an increase in investor activity buying studios and one-bedrooms, presumably gearing up toward Expo 2020 with rental income in mind,” remarked Lynnette Abad, the director of Data & Research at Property Finder.

Communities that clocked in the highest number of overall sales for residential properties priced below Dh1 million in 2019 were Jumeirah Village Circle (1,473 transactions), International City (1,426), Meydan (1,079), Business Bay (976) and Jumeirah Lakes Towers (887), according to Data Finder. The average sale price for a property in JVC was Dh586,389 in 2019.

Dubai registered 9,044 off-plan transactions for units below Dh1 million in 2019. In the off-plan market, Meydan accounted for most deals under Dh1 million (1,040), followed by Dubai Hills Estate (812), JVC (783), Business Bay (768) and Dubai South (689). The average sale price for an off-plan property in Meydan City was Dh605,777, said Abad.

Azizi Riviera accounted for the most off-plan property transactions priced within Dh1 million in Meydan in 2019. Co-living projects Socio, Collective and Collective 2.0 contributed to the most off-plan deals below Dh1 million in Dubai Hills Estate. In Dubai South, MAG 5 Boulevard, Mag 5 and Emaar South registered the most off-plan deals below Dh1 million, she stated.   

There were 6,472 deals on the secondary market for properties priced below Dh1 million in 2019. International City accounted for most such deals (1,128) in the secondary market, followed by JVC (690), Al Furjan (507), Dubai Sports City and Dubai Marina (469 each).

According to Property Finder, the average sale price for a ready property in International City was Dh313,173 last year.

England, Spain and Greece Clusters accounted for most sub-Dh1 million deals on the secondary market in International City in 2019. Ghalia Constella in JVC and Starz by Danube in Al Furjan also registered hundreds of transactions for units below Dh1 million.

"There has been a definitive shift on the part of developers to cater to latent demand from the mid-income market by building affordable properties below Dh1 million," remarked Abad.

"They also offer competitive payment plans and other incentives to make it more accessible to mid-income buyers," she added.