Luxury home sales in Dubai declined in the third quarter, as a subdued economy and overdevelopment continue to hound the Middle Eastern metropolis.
Total sales volume across 14 high-end areas in the UAE capital fell 13.9% to AED8.7 billion (US$2.369 billion) in the third quarter compared to the three months prior, according to a report on Tuesday from brokerage Luxhabitat. Though high-end activity has been strongest in new freehold developments and in established luxury communities like Downtown.
Off-plan purchases in Jumeirah drove the seaside area to the top of Luxhabitat’s list of the best-performing luxury communities. Sales volume totaled AED1.35 billion in the third quarter, beating luxury stalwarts like Downtown Dubai—home to the soaring Burj Khalifa—and the desirable Palm Jumeirah, a man-made archipelago shaped like a palm leaf.
Jumeirah has traditionally been a leasehold area owned by local Emirates and Arab nationals from around the Gulf, who rented to “well-to-do expats,” said Brigitte Tenbergen, associate director at Luxhabitat. But new freehold projects, such as Port de la Mer—which sits on a marina and yacht club—and Madinat Jumeirah Living, has potential to make the area attractive to different kinds of buyers, she added.
“There’s been an overwhelming demand for apartments in these projects. These projects also have a relatively reasonable price tag and have been a major success,” she added.
In total, off-plan purchases at all price points exceeded resales, accounting for around 60% of all activity, according to Luxhabitat, drawing from data supplied by Property Monitor.
Property Monitor, a site by real estate firm Cavendish Maxwell, put out its own third-quarter market report earlier this month.
It showed home prices are falling in almost every corner of Dubai. Home prices, including villas, townhouses and apartments, declined 3.4% in the third quarter compared to a year ago. Even more striking was that prices in every single community tracked in the report fell in the third quarter by at least 1.3%.