The number of the most expensive villas sold on Dubai’s prestigious Palm Jumeirah fell by nearly half in the first six months of 2016 compared with a year earlier as sellers shied away from marketing property in a falling market.
According to property broker Cushman & Wakefield Core transaction numbers for villas worth more than Dh10 million fell 44 per cent compared with the same period a year earlier.
It said that although super prime villas on the manmade island were the worst affected, transaction activity levels on all Palm Jumeirah villas fell approximately 25 per cent over the period.
Transaction levels were also down 25 per cent in Dubai Marina and 19 per cent in Downtown Dubai for apartments worth more than Dh10m, while apartments worth more than Dh4m suffered 43 per cent drops in transaction levels in Dubai Marina and 36 per cent falls in Downtown.
However, despite falling transaction levels, Cushman & Wakefield Core reported that sales prices per square foot for villas on the Palm remained relatively steady, dropping just 4 per cent over the period. Rents fell by 7 per cent over the period.
“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," said David Godchaux, CEO of Cushman & Wakefield Core.
“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," he added.
Overall the report reveals prime residential prices in Dubai are 60 per cent below prime New York, 75 per cent below prime London and a staggering 85 per cent below prime Hong Kong.