The Business Bay area of Dubai has seen an uptick in buyers in the third quarter. Antonie Robertson / The National
The Business Bay area of Dubai has seen an uptick in buyers in the third quarter. Antonie Robertson / The National
The Business Bay area of Dubai has seen an uptick in buyers in the third quarter. Antonie Robertson / The National
The Business Bay area of Dubai has seen an uptick in buyers in the third quarter. Antonie Robertson / The National

Why Dubai apartments are the choice ahead of villas for property hunters again


Ian Oxborrow
  • English
  • Arabic

Apartments in Dubai are the preference of buyers once again in a reversal of the pivot to villa and town house living during the early part of the coronavirus pandemic.

Villas became more attractive during the onset of Covid-19 as residents sought more space and many workers shifted to home working.

However, with many of the restrictions now lifted, the market has shifted back with apartments becoming more popular, according to brokers.

The third quarter of this year saw 73 per cent of Dubai sales transactions involve apartments, Dubai Land Department data showed. This compares to 67 per cent in the same period last year.

Total sales transactions in Dubai were up 61 per cent year on year in the third quarter, while there was a 76 per cent increase in apartment transactions year on year. Villa transactions were down 5 per cent during the same period.

This shift can be attributed to rising prices in the villa market, and multiple interest rate rises this year, brokers said.

Brokerage Allsopp&Allsopp said it has started to see a shift back to the prime popular areas such as Dubai Marina, Downtown Dubai and Business Bay. It saw a surge in popularity in JVC due to the amount of amenities and entertainment now available in the area, coupled with its affordability.

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My Dubai Rent: Family rent Dh170k villa in Al Barsha a short walk from school

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“On the buying side, there was the change during Covid of lowering the deposit amount needed to purchase a property, which increased peoples' affordability, as well a record low interest rates which made monthly mortgage payments very attractive,” said Lewis Allsopp, chief executive at Allsopp&Allsopp.

“Now I believe we are seeing the effects of increased interest rates (impacting affordability), buyers reaching a ceiling on what they're prepared to pay for a villa or town house and also with apartments not seeing the same rate of increase over the last couple of years, they're really attractively placed in the market at the moment.”

Dubai's property market rebound has picked up pace this year as the emirate's economy continues to make a strong recovery from pandemic-driven headwinds.

The emirate's economy grew by 6.2 per cent in 2021, according to preliminary data from the Dubai Statistics Centre. In the first three months of this year, Dubai's gross domestic product expanded 5.9 per cent, according to government data.

Another reason for the decline in villa activity and rise in apartment buying is a lack of supply in the villa segment.

“One of the main reasons that we are seeing an increase in demand for apartments is because, quite simply, there are no villas available,” said Mark Castley, chief operating officer at LuxuryProperty.com.

“The villa market has boomed in the wake of the pandemic to the point where supply is extremely limited.

“From a pricing perspective, villas were a very attractive option back in 2020, but in the current market many buyers at around the Dh5 million point are getting priced out of the market. For the down payment that's required at that level, it makes a bit more sense to aim for a good apartment in the Dh3m to Dh4m range. A combination of affordability and availability have helped to put apartments back on the radar for most buyers.”

He added that the majority of projects being handed over recently are apartments. These include developments such as Act One/Act Two, Burj Royale and Forte in Downtown. Madinat Jumeirah Living has started to hand over, as well as apartment projects on Palm Jumeirah such as One at Palm, Atlantis the Royal.

He said a “change in the city's atmosphere” has also affected buying trends.

“In the immediate aftermath of the pandemic, larger and more secluded homes were the order of the day. With so many restrictions being eased in 2022, there isn't that same desire for isolation among buyers.”

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Dubai apartment prices, September 2022

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The attraction of apartments was backed up by Betterhomes' group managing director Richard Waind.

He said that for investors, the value offered by apartments, where prices are still behind the peak of 2014, is “compelling”.

“The option to both short or long let them and the lower price entry point make apartments particularly attractive to investors,” he said.

“In addition, end users who may now find villas unaffordable are also now returning to apartments.”

Prime residential values in Dubai, which encompass The Palm Jumeirah, Emirates Hills and Jumeirah Bay, have risen significantly during the past year.

They rose by 89 per cent in the past 12 months, according to a report by property consultancy Knight Frank.

“Prime residential values in Dubai continue to strengthen, growing by 29 per cent in Q3 [third quarter] alone, fuelled by a persistent deluge of UHNWI [ultra high net worth individuals] who are zeroing in on Dubai’s premier districts in search of second homes,” said Faisal Durrani, partner and head of Middle East research at Knight Frank.

The market boom is expected to continue across all price segments, with a further boost set to come from the hosting of the football World Cup in Qatar next month.

Average prices for residential properties in Dubai rose by 8.9 per cent in 12 months to the end of September, with average apartment prices rising by 8 per cent and villas recording a more than 14 per cent jump, according to CBRE.

The specs
  • Engine: 3.9-litre twin-turbo V8
  • Power: 640hp
  • Torque: 760nm
  • On sale: 2026
  • Price: Not announced yet
Vidaamuyarchi

Director: Magizh Thirumeni

Stars: Ajith Kumar, Arjun Sarja, Trisha Krishnan, Regina Cassandra

Rating: 4/5

 

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The specs
 
Engine: 3.0-litre six-cylinder turbo
Power: 398hp from 5,250rpm
Torque: 580Nm at 1,900-4,800rpm
Transmission: Eight-speed auto
Fuel economy, combined: 6.5L/100km
On sale: December
Price: From Dh330,000 (estimate)
UAE currency: the story behind the money in your pockets
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Ms Yang's top tips for parents new to the UAE
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'Gold'

Director:Anthony Hayes

Stars:Zaf Efron, Anthony Hayes

Rating:3/5

UAE currency: the story behind the money in your pockets
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THE SPECS

Engine: 6.75-litre twin-turbocharged V12 petrol engine 

Power: 420kW

Torque: 780Nm

Transmission: 8-speed automatic

Price: From Dh1,350,000

On sale: Available for preorder now

UAE currency: the story behind the money in your pockets
Defined benefit and defined contribution schemes explained

Defined Benefit Plan (DB)

A defined benefit plan is where the benefit is defined by a formula, typically length of service to and salary at date of leaving.

Defined Contribution Plan (DC) 

A defined contribution plan is where the benefit depends on the amount of money put into the plan for an employee, and how much investment return is earned on those contributions.

How to avoid crypto fraud
  • Use unique usernames and passwords while enabling multi-factor authentication.
  • Use an offline private key, a physical device that requires manual activation, whenever you access your wallet.
  • Avoid suspicious social media ads promoting fraudulent schemes.
  • Only invest in crypto projects that you fully understand.
  • Critically assess whether a project’s promises or returns seem too good to be true.
  • Only use reputable platforms that have a track record of strong regulatory compliance.
  • Store funds in hardware wallets as opposed to online exchanges.
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Election pledges on migration

CDU: "Now is the time to control the German borders and enforce strict border rejections" 

SPD: "Border closures and blanket rejections at internal borders contradict the spirit of a common area of freedom" 

Europe’s rearming plan
  • Suspend strict budget rules to allow member countries to step up defence spending
  • Create new "instrument" providing €150 billion of loans to member countries for defence investment
  • Use the existing EU budget to direct more funds towards defence-related investment
  • Engage the bloc's European Investment Bank to drop limits on lending to defence firms
  • Create a savings and investments union to help companies access capital
Labour dispute

The insured employee may still file an ILOE claim even if a labour dispute is ongoing post termination, but the insurer may suspend or reject payment, until the courts resolve the dispute, especially if the reason for termination is contested. The outcome of the labour court proceedings can directly affect eligibility.


- Abdullah Ishnaneh, Partner, BSA Law 

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While you're here
LILO & STITCH

Starring: Sydney Elizebeth Agudong, Maia Kealoha, Chris Sanders

Director: Dean Fleischer Camp

Rating: 4.5/5

Ferrari 12Cilindri specs

Engine: naturally aspirated 6.5-liter V12

Power: 819hp

Torque: 678Nm at 7,250rpm

Price: From Dh1,700,000

Available: Now

Gifts exchanged
  • King Charles - replica of President Eisenhower Sword
  • Queen Camilla -  Tiffany & Co vintage 18-carat gold, diamond and ruby flower brooch
  • Donald Trump - hand-bound leather book with Declaration of Independence
  • Melania Trump - personalised Anya Hindmarch handbag
UAE squad

Esha Oza (captain), Al Maseera Jahangir, Emily Thomas, Heena Hotchandani, Indhuja Nandakumar, Katie Thompson, Lavanya Keny, Mehak Thakur, Michelle Botha, Rinitha Rajith, Samaira Dharnidharka, Siya Gokhale, Sashikala Silva, Suraksha Kotte, Theertha Satish (wicketkeeper) Udeni Kuruppuarachchige, Vaishnave Mahesh.

UAE tour of Zimbabwe

All matches in Bulawayo
Friday, Sept 26 – First ODI
Sunday, Sept 28 – Second ODI
Tuesday, Sept 30 – Third ODI
Thursday, Oct 2 – Fourth ODI
Sunday, Oct 5 – First T20I
Monday, Oct 6 – Second T20I

Profile

Company: Justmop.com

Date started: December 2015

Founders: Kerem Kuyucu and Cagatay Ozcan

Sector: Technology and home services

Based: Jumeirah Lake Towers, Dubai

Size: 55 employees and 100,000 cleaning requests a month

Funding:  The company’s investors include Collective Spark, Faith Capital Holding, Oak Capital, VentureFriends, and 500 Startups. 

UAE currency: the story behind the money in your pockets
The specs

Engine: 5.2-litre V10

Power: 640hp at 8,000rpm

Torque: 565Nm at 6,500rpm

Transmission: 7-speed dual-clutch auto

Price: From Dh1 million

On sale: Q3 or Q4 2022 

What are the GCSE grade equivalents?
 
  • Grade 9 = above an A*
  • Grade 8 = between grades A* and A
  • Grade 7 = grade A
  • Grade 6 = just above a grade B
  • Grade 5 = between grades B and C
  • Grade 4 = grade C
  • Grade 3 = between grades D and E
  • Grade 2 = between grades E and F
  • Grade 1 = between grades F and G
Analysis

Members of Syria's Alawite minority community face threat in their heartland after one of the deadliest days in country’s recent history. Read more

While you're here
Abu Dhabi GP schedule

Friday: First practice - 1pm; Second practice - 5pm

Saturday: Final practice - 2pm; Qualifying - 5pm

Sunday: Etihad Airways Abu Dhabi Grand Prix (55 laps) - 5.10pm

The burning issue

The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE. 

Read part four: an affection for classic cars lives on

Read part three: the age of the electric vehicle begins

Read part two: how climate change drove the race for an alternative 

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Volvo ES90 Specs

Engine: Electric single motor (96kW), twin motor (106kW) and twin motor performance (106kW)

Power: 333hp, 449hp, 680hp

Torque: 480Nm, 670Nm, 870Nm

On sale: Later in 2025 or early 2026, depending on region

Price: Exact regional pricing TBA

Benefits of first-time home buyers' scheme
  • Priority access to new homes from participating developers
  • Discounts on sales price of off-plan units
  • Flexible payment plans from developers
  • Mortgages with better interest rates, faster approval times and reduced fees
  • DLD registration fee can be paid through banks or credit cards at zero interest rates

Director: Laxman Utekar

Cast: Vicky Kaushal, Akshaye Khanna, Diana Penty, Vineet Kumar Singh, Rashmika Mandanna

Rating: 1/5

Company Profile

Name: Thndr
Started: 2019
Co-founders: Ahmad Hammouda and Seif Amr
Sector: FinTech
Headquarters: Egypt
UAE base: Hub71, Abu Dhabi
Current number of staff: More than 150
Funds raised: $22 million

Updated: October 25, 2022, 8:24 AM`