The year 2008 may have seen Dubai's property market at its peak but it is better known for the buzzing market that, at that point of time, was ruled by speculators who mastered the art of flipping properties and making millions in seconds. Things have changed dramatically since then. Investors are still taking cautious steps when it comes to investments. However, Dubai property market is now witnessing a substantial interest from owner occupiers who are lured by the affordable prices for high-quality units in attractive locations that were way beyond their reach during the peak time.
Property spoke to a few agents in the market to find out what a prospective buyer with a budget of Dh2 million could have managed to buy during those crazy days and what he or she can buy today with the same amount.
Dh2 million in 2008
During the boom time, a buyer with a budget of Dh2 million had limited options to choose from. While good-quality villas didn't fit into this budget, a one-bedroom apartment was all a buyer could purchase with this amount. "Dh2 million in 2008 was good enough to buy only studios and one-bedroom apartments," says Mario Volpi, sales manager, PowerHouse Properties.
A one-bedroom apartment in The Waves, Dubai Marina, used to cost Dh1.95 million during the boom time, but the same property is now available for Dh650,000, according to PowerHouse Properties. This means, today one can buy three one-bedroom units in The Waves for the price of one unit in 2008.
While it gives an opportunity for investors to own multiple units that could generate rental income, it also opens up doors for end users who couldn't afford this unit back then. Some of the other properties that used to fetch about Dh2 million in 2008 are a one-bedroom apartment in Marina Quays, Dubai Marina (Then: Dh2.02 million; now: Dh900,000), a one-bedroom apartment in Al Ghozlan, The Greens (Then: Dh1.96 million; now: Dh590,000) and a one-bedroom apartment in Jumeirah Beach Residences (Then: Dh2.2 million; now: Dh950,000), says Mario.
Mohanad Al Wadiya, managing director of Harbor Real Estate, says since the prices skyrocketed in 2008, Dh2 million wasn't considered to be a substantial amount to buy a property that was spacious enough and that was why the Dh2 million budget was largely limited to apartment segment. With a budget of Dh2.2 million, in 2008 one could buy a one-bedroom apartment in South Ridge, Downtown Dubai District (Now: Dh900,000 to Dh1.2 million). Some of the other available options were one-bedroom apartments in The Greens (Then: Dh2.2 million; now: Dh650,000 to Dh800,000), Jumeirah Beach Residence (Then: Dh2 million; now: Dh850,000 to Dh1 million), according to Harbor Real Estate.
Dh2 million in 2011
A lot has changed since the boom days of 2008 and so has the value of Dh2 million in Dubai's real estate market. Today, with a budget of Dh2 million, buyers are spoilt for choice. Probably the biggest change the crisis has brought about in the market is the sudden availability of high-quality villas and townhouses in excellent locations at affordable prices.
"Owning a five-bedroom villa anywhere in Dubai for Dh2 million was impossible in 2008. However, it is no more an impossible task," says Mohanad. For example, a five-bedroom spacious villa in The Villa project and a three-bedroom villa in the Springs now cost Dh2 million each. "These properties can be purchased for approximately Dh2 million, including all the transaction fees. They also have the potential to provide you with the financial performance you desire," says Mohanad.
Dagama Properties, a real estate agency that specialises in the villa and townhouse segment, has townhouse listings ranging from Dh1.2 million upwards. "Buyers have plenty to choose from as far as villas and townhouses are concerned," says Vivian King, marketing director of Dagama Properties. She adds that Arabian Ranches has quite a few units in the Dh2 million budget range.
Al Reem, also known as Gazelle, in Arabian Ranches features single family, two-storey, three-bedroom townhouses that cost from Dh1.75 to Dh2.2 million. These units, which are spacious and offer park, lake or pool views, used to cost from Dh3.2 to Dh4.2 million in 2008. A three-bedroom townhouse in Al Reem, Arabian Ranches with lake views and spread over 2,788 square feet, is now priced at around Dh2 million, according to PowerHouse Properties. The same property, featuring a landscaped garden and located opposite a park, used to cost a staggering Dh3.9 million during the boom time. Palmera, part of Arabian Ranches, featuring single family attached villas, has two-storey units with two or three bedrooms. The prices of these spacious villas now range from Dh1.6 to Dh2.2 million, says Vivian, adding that the same units used to cost from Dh2.7 to Dh3.2 million in 2008. Vivian feels now is the time to strike the deal for prospective buyers looking for a home.
For example, a beautiful two-storeyed, three-bedroom townhouse in the Alma development in Arabian Ranches featuring Spanish architecture now costs from Dh1.8 to Dh1.9 million. It is definitely a good bargain given the fact that the same unit cost Dh2.6 million in 2008. "Arabian Ranches and its affiliated golf course and polo club is still one of the most preferred developments in Dubai for four years running as it is an exceptionally well maintained community and is competitive on its price per square foot," says Vivian.
Victory Heights, says Vivian, is another villa community that had units that cost in excess of Dh2.5 million in 2008, but the prices of these three-bedroom villas and townhouses have come down to Dh 1.4 to Dh1.9 million. "Victory Heights is one of the most sought-after villa communities in Dubai primarily because of its strategic location, the presence of a golf course designed by Ernie Els and the Els Club," says Vivian.
The apartment segment too has become exceedingly affordable leaving buyers with plenty of choice. Availability of spacious apartment units in certain high-profile developments are reflective of the price correction that has taken place in the market.
Mario says, "Two-bedroom units in Trident Bayside Residence located in Dubai Marina are now available for Dh1.8 million while one would have had to shell out at least Dh3 million or more for the same units in 2008." The units, which offer excellent marina views and are also in close proximity to a lot of retail outlets, JBR Walk and beaches, are good value for money options for any discerning buyer.
Three-bedroom units in Shoreline Apartments on Palm Jumeirah used to cost a whopping Dh4 million in 2008. The prices of these extremely spacious apartments, each with a size of 2,260 square feet, are now in the range of Dh2 million - to be precise, Dh1.85 million. Also on offer for a price of Dh2 million are two-bedroom apartments in South Ridge and three-bedroom apartments in Jumeirah Beach Residences, as listed by Harbor Real Estate. "These properties were worth almost double their current price in 2008 during the boom days," says Mohanad.
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