Dubai: A 14,331 square feet Bulgari Resorts and Residences apartment in Dubai sold for Dh60 million was easily the priciest deal in Dubai’s freehold market during Q1-18.
Bulgari Resorts Dubai is located on the seahorse-shaped Jumeira Bay Island, a mixed-use manmade island.
Two villas on Jumeirah Bay, meanwhile, fetched Dh41.1 million and Dh36 million, while the under development Royal Atlantis Residences is also starting to build up a profile.
Two of the latter recorded transactions of Dh25 million and Dh21.3 million during the period, while another Palm based development, the Alef Residences, secured Dh14.2 million for a 6,912 square feet unit, according to data from Luxhabitat.
Dubai’s flagship tower project, the 1/JBR, saw one of its units selling for Dh12.97 million.
What is interesting is that within the luxury end, sales are happening both direct from developer as well as from investor-owners who want to make an exit.
“There is still more demand in high-end residential projects direct from developers,” said Brigitte Tenbergen, Associate Director of Luxhabitat.
“They all have interesting payment plans in place plus prime locations - waterfront properties mainly.
“Secondary market properties are moving as well… but with major price reductions. The property will need to be in good condition or needs to be upgraded and in a good community.”
Unlike last year when villas from the area dominated, Emirates Hills had only one entry in the Q1-18 hustings, when a 12,423 square feet unit commanded a sale price of Dh25.9 million.
Also, there weren’t any of the mega deals like the one for Dh102 million on a penthouse at The One, the Omniyat project on the Palm.
When it comes to more accessible upscale properties, the Emaar Beachfront’s tower apartments remains the top pick.
The first one released in the second week of January and sold out in days. The one-beds start at Dh1.38 million, while the two-beds are from Dh2.13 million and three-beds from Dh4 million.
“Demand is high - (there’s the) private beach, spectacular views of the Palm or Marina and the Miami feel and style of living,” said a Luxhabitat spokesperson.
Of the high-end clusters, the three top performers during the first quarter were Dubai Marina (Dh1.09 billion), the Downtown Dubai (Dh820.6 million) and the Palm (Dh558 million).
Investors realise they stand a good chance of landing a deal they can rate as favourable to their interests. And they are patient about how they go about sealing it.
“They may realise more value from (an) increasingly rational secondary market,” said Sally Ann Ghai, Associate Director.
And sellers too are getting realistic about their demands — “Sellers (have) now reality-checked their asking prices,” Ghai said, “compared to developers who are front-loading pricing in most prime off-plan developments. The question is whether offplan can hold these values on delivery under weight of supply?”
The answer to that will be decisive as developers get cracking on their existing projects, those on the ground as well as the many that will launch construction soon.
As for buyers, they seem to have cooled off on offplan compared with the feverish rush in 2017.
In Q1-18, offplan transaction volumes dropped nearly 28 per cent from Q4-17 to Dh5.8 billion.
“What I perceive as a general sentiment is that buyers are overwhelmed with the amount of projects in the market and in no rush,” said Tenbergen.
“They take their own sweet time and are demanding discounts/waivers as they are well aware that there will be an oversupply of properties in the market.”
These buyer tactics could be a factor in why the average transaction value on luxury property dipped by 0.5 per cent in the first quarter. More could be in the offing.
Some respite on high-end rentals
After an extended spell of lacklustre performances, rental demand for high-end properties in Dubai could be in for a slight improvement. “In Q1-18 we witnessed an influx of new residents to Dubai with higher-than-average budgets indicating the demand for luxury rentals will continue through Q2 and Q3 2018, which is when many tenants choose to relocate to Dubai,” said Ryan Kasper, Luxury Rentals Director at Luxhabitat.
But when it comes to residential rents at the high-end, there is still pressure and have softened by 5-15 per cent on average in Q1-18 compared to a year ago.