Dubai is an ever-expanding city, where not only towers but entire new communities are built
Each of them is distinct in architectural design, theme, range of facilities and amenities, and therefore appeals to different profiles. As new communities arise, the popularity of other changes along with their prices. Affordability is, without a doubt, one of the major factors when it comes to choosing your future home.
But do residents really prioritise Dubai’s cost-effective neighbourhoods and which ones?
Tenants are Price-Driven
When talking about established communities offering a comfortable lifestyle at fair price statistics are interesting. JVC and JLT are still maintaining higher demand in comparison to other affordable communities. In addition, Dubai Sports City and Dubailand have recently shown rapid popularity growth.
“We noticed that a lot of tenants are now choosing to leave older well-established communities. For example, they move from Emirates Living to areas like Mira, Damac Hills and Arabian Ranches 2. They do so because they can rent a brand-new villa with a better community lifestyle for a very reasonable rent”, says Ashley Hawthorne, Leasing & Property Management Director at AQUA Properties.
Nowadays, properties come with additional benefits such as chiller free and one-month free stay. Therefore, tenants can choose from a variety of available listings. Proximity to public transport is an important factor in decision making. As well as the fact that the unit is under property management. “To be honest, tenants are price-smart. The price is driving them to compromise on the location and move out to these newer communities. If a landlord in their current property is not willing to reduce their rent, tenants simply move.
Apart from the price, they get better quality and new fittings. In older communities this was not the case unless the property was upgraded”, adds Ashley. Consequently, prices have dropped already in established communities to be able to compete with new ones. “Prices in the established communities have decreased dramatically over the last 12 months. For instance, a 2-bedroom townhouse in Arabian Ranches used to be rented for AED 120K. Nowadays you can find one for approximately AED 85K. Also, 2-bedroom independent villa in JVT was once rented for AED 125K to 130K. Now you can rent it for AED 110K to 115K”, concludes Ashley.
What About the Buyers?
According to the latest statistics, upscale communities have shown an increase in demand. Leading ones are Palm Jumeirah, Arabian Ranches, Dubai Marina and Downtown Dubai. Affordability seems to be less important for buyers who are not on a budget. Others looking for apartments in Dubai for sale will do the math. For example, currently, you can buy a 1-bedroom apartment in Palm Jumeirah at an average price of AED 1,7 million. At the same time, the same unit category in Al Furjan costs a million less.
“The decision will depend on the purpose they are buying for. The choice differs if they are looking for an investment opportunity or if they are end-users. When talking about more affordable, yet attractive communities, Jumeirah Lakes Towers is still in demand, specifically among end-users. Jumeirah Village Circle is also a favoured community. Both among tenants and investors”, says Nisrine Ezzeddine, Sales Director at AQUA Properties.
Since buyers are thinking long term, price is obviously not the key factor. Location and capital appreciation play a major role in decision making. “Some end-users, are not willing to compromise on the location. They can still get good prices in desirable communities such as Dubai Marina and Business Bay. However, they will have to rethink their tower selection”, concludes Nisrine.
The government recently decided to establish a “Higher Real Estate Planning Committee”. Its purpose is to create a balance between real estate supply and demand. This will surely have a positive impact on the market. How will it affect properties for rent in Dubai and will sale prices stabilise, remains to be seen.