Luxury Property Are Back As Dubai Buyers’ Favourite
Considering the property price difference between general and prime properties in Dubai is widening, experts believe that it is a sign of rebound for luxury properties. This is especially visible in the villa and apartment segments. During 2012 and 2014, as wealthy investors kept putting in money into luxury properties, the gap began to widen. But, after the market was sluggish in 2014, demand for affordable properties increased, resulting in spread compression.
According to an industry report, in the last 12 months, there has been a reversal in the trend as the spreads have begun to widen corresponding to the increasing demand for high-end properties. This trend is an indicator of the bulls market as was seen in 2012, studies point out.
While in the apartment segment, the gap between general and prime properties narrowed by 340 per square foot after 2014, the spread reduced by 265 per square foot in the villa spaces. This made the demand for affordable housing go up which decreased the spread between prime and general properties in Dubai, says the report.
The report also highlights a dichotomy between general and prime properties in terms of inter-community analysis between Palm Jumeirah and Dubai Marina. While in Palm Jumeirah, the luxury apartments are more in demand suggesting that there has been greater variability in terms of location and building quality, in Dubai Marina, the prices have gravitated towards a mean price, indicating that there has been a continuing narrowing of price differences between general and prime properties in relation to the overall market conditions.
In fact, the report mentions that the spreads between Jumeirah Lake Towers and Dubai Marina reduced significantly after the peak of 2014 as affordable housing gathered pace and the market started looking for bargains. As Jumeirah Lake Towers has been gentrified with premium developments and housing, the spreads will widen as luxury housing rebounds, but not by a significant amount, mention experts.
Due to newer and expensive stocks being released, in the villa spaces, Meadows/Springs community were outperformed by Arabian Ranches.