Transaction activity levels on Palm Jumeirah villas dipped approximately 25% over the last 12 months, while prime villas (over AED 10 million) fell by 44% year-on-year, according to the latest research report from Core, UAE Associate of Savills.
The Q2 2016 Established Prime Residential Markets in Dubai report also outlines tough market conditions for the emirate’s other prime areas including Al Barari, Dubai Marina and Downtown, with Emirates Hills bucking the trend.
The report found that sales prices per sq. ft. for villas on the Palm remain relatively steady with just a 4% year-on-year drop as landlords continue to command prices for well-maintained or refurbished properties. The area’s rental market saw a 7% year-on-year drop, resulting in a marginal fall in yield levels.
David Godchaux, CEO of Core, UAE Associate of Savills, says: “With a total stock of approximately 1,700 villas, an estimated 150-200 villas are currently available for sale on Palm Jumeirah.
“More units are anticipated to be held by investors as many are not pressed financially to sell in this bottoming market, while a few others look towards commanding premiums by refurbishing existing units and attracting buyers who are seeking contemporary products.
“A strong recovery in prices is not anticipated in the near term as we expect this underlying stock to keep the sales prices static even if the demand revives in the coming quarters.”