Jumeirah Village Circle: A community to watch out for

The average price of an apartment in Jumeirah Village Circle as of May 2017 was Dh852 per sqft, while average rent for the month ranged from Dh40,000 for a studio to Dh120,000 for a three-bedroom.

Jumeirah Village Circle (JVC) is an emerging neighbourhood in Dubai, with a mix of established and under-construction projects. A freehold master development by Nakheel launched in 2005, JVC is built over an area of over 870 hectares and is estimated to have approximately 28 residential projects under construction. The community is organised into six districts, with all districts except district 16 having similar plotting and layout characteristics.

Located on Sheikh Mohammed Bin Zayed Road between Hessa Street and Al Khail Road, JVC offers apartments as well as townhouses, and its competitive prices have made it a popular area for investment in recent months.

According to the Property Monitor Index (PMI), the average price of an apartment in JVC as of May 2017 was Dh852 per sqft, while average rent for the month ranged from Dh40,000 for a studio to Dh120,000 for a three-bedroom. Apartment prices in the community have declined by -0.22 per cent month on month and 4.8 per cent over the last 12 months.

Average sale prices peaked in line with wider Dubai market in Q2 2014, at approximately Dh984/sqft for JVC and have since declined, trading within a close range of Dh830 to Dh870 per sqft over the last 12 months. Rental declines have averaged -0.16 per cent between April to May 2017 with a steep 12 per cent decline over last 12 months.

In May, 64 secondary market transfers for apartments were completed in JVC, nearly half of the top two locations of Dubai Marina and International City, which had 130 and 121 transactions respectively during the month.

Meanwhile, JVC topped the off-plan sales tally in May with 335 apartment transactions within the community during the month, significantly higher than the next location Dubai South, which was at 175 off-plan sales for apartments. Majority of the off-plan transactions in May (totalling 108) were within the Ghalia Constella development by Damac located in District 14, which features serviced studios, one and two-bedroom apartments expected to be handed over in Q2 2017.

Among the secondary market transactions in May, nearly one third were in the Laya Residences, where majority of the inventory sold was within the Dh500,000 to Dh1 million range. This development also has the highest transactions so far in June. In JVC, off-plan transactions this month so far have been highest in Belgravia by Ellington Properties, followed by Tower 108 by Damac.

While a significant number of projects within JVC are still under development, existing infrastructure and community facilities, as well as proximity to locations such as Dubai Marina, Jumeirah Lakes Towers and Jebel Ali, among others, makes it a popular location for renting and hence has topped the investment tally.

Among the completed projects are the villas and townhouses by Nakheel, the former located in district 16 and the latter in district 12. About 300 two-bedroom villas were completed in 2013 and 90 four-bedroom villas were delivered in 2015. Around 400 townhouses were also completed in 2013.

There has been limited office tower development in the community so far, though currently vacant plots could in the future be used for commercial buildings. In addition to residential properties, hotel/serviced apartment category has been created in JVC through developments such as Vantage and Constella by Damac, The One by Ramada Plaza and Suites in the SKAI by SKAI Holdings (now FIVE Holdings). Commercial plots of various configurations including G+2, 4, 8, 10 among others are available for sale for sub-developers to undertake independent construction and these are also likely to be developed in the coming years.

The recent provision for district cooling facilities being provided to JVC and the neighbouring Jumeirah Village Triangle is also expected to improve interest in the area. While price and rent declines continue within JVC, these mirror declines across the Dubai residential market and any additional pressure on these metrics within JVC is likely to come from upcoming supply in the micro-market.

The writer is senior consultant, strategic consulting and research - Cavendish Maxwell. Views expressed are her own and do not reflect the newspaper's policies.