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Dubai villa market: Will the recent floods deter demand?

A recent report by Property Finder revealed that 40 per cent of property sales in Dubai so far this year have been for villas, with 85 per cent of buyers looking for three-bedroom and above options. Popular areas for villa purchases include Dubai Hills Estate, Al Furjan, Arabian Ranches, Palm Jumeirah, and Mohammed Bin Rashid City.

However, recent record-breaking rainfall in the UAE caused extensive damage to residential communities and villas, with many properties submerged in floodwater. Many residents of villas faced water leakage from the ceiling due to heavy rains, and suffered extensive damage, resulting in the loss of valuable possessions. The question therefore arises whether the demand for villas will remain robust or if there will be a dip going forward. Our experts weigh in on this matter.

The demand to continue unabated

The recent heavy rains in the UAE have posed challenges, particularly for villas which suffered damage. However, experts believe that the demand for villas in the long term is expected to remain stable due to the quick action taken by the government and developers.

“Despite the flooding, ready villa prices in the first quarter of 2024 have risen 11.3% year-over-year, compared to a 2.9% increase for ready apartments, indicating a strong demand. While some buyers may become more cautious and pay closer attention to the impact of floods on properties, these concerns are not likely to drastically change the overall market. This is partly because the type of extreme rainfall we recently experienced is very rare—it last occurred 75 years ago and is unlikely to occur frequently in the future,” says Artaches Grigorian, a real estate broker working with Whitewill Dubai.

Echoing a similar sentiment, Sankey Prasad, Chairman and MD, India and CMD Middle East Project Leaders, Colliers adds that villas in the UAE are highly sought-after for their spacious living areas, customisation options, outdoor spaces, and privacy. While some villas were damaged by recent heavy rains, the UAE is known for its proactive problem-solving approach. With multiple luxury villa projects slated for completion in 2024, the real estate market is expected to bounce back.

“Indeed, certain villas bore the brunt of the UAE’s record-breaking downpour. Despite this, the demand for villas remains robust overall, and the residential market is anticipated to proceed as usual. Moreover, the susceptibility of some villas and townhouses stems from the fact that UAE communities were not originally designed to withstand such unprecedented storms. Villas in the UAE are typically designed to suit the region’s climate, characterised by mild winters and minimal rainfall. Having said that, being ground-level properties, villas are more susceptible to flooding compared to apartments and therefore as global weather patterns evolve, developers are expected to enhance water drainage systems and bolster waterproofing measures,” elaborates Haider Tuaima, Director and Head of Real Estate Research, ValuStrat.

What should buyers look for before purchasing a villa?

According to experts, villas are vulnerable to weather conditions due to insufficient elevation and inadequate insulation at construction joints. Recent heavy rains have caused damage in two main ways. Firstly, water entering the villas affects furnishings and wooden flooring on the ground level. Secondly, leaks occur on the roof when rain impacts the villa, especially if the joints between concrete slabs are not properly insulated.

Hence, the havoc created by the unexpected rainfalls in the UAE calls for a more vigilant approach from prospective villa buyers. After all, buying a villa is a substantial investment and extreme floods can put that investment at risk.

“Potential villa buyers must conduct thorough research on specific areas and developments to ascertain their susceptibility to flooding. When choosing a villa in a neighbourhood, it is important to check the drainage systems, flood mitigation measures, and infrastructure upgrades planned to prevent flooding. Consulting a reliable real estate agent specialising in villas and getting a professional inspection by a qualified inspector to identify potential water damage issues is crucial. This will help buyers make informed decisions aligned with their investment goals and risk tolerance,” adds Prasad.

“They should check for sand still covering parts of the property, water stains on the building’s exterior, water lines on walls, and bubbled or damaged paint inside the villa to determine how high the water reached. Hiring companies specialising in diagnosing and repairing rain damage can provide additional assurance for informed purchasing decisions in the current climate,” explains Grigorian.

Current villa homeowners in the UAE can also protect their properties from extreme weather by elevating water heaters and air conditioners to prevent flood damage, installing check valves in sewer traps to prevent backflows, and constructing interior barriers and sealing walls with waterproofing compounds to keep floodwater out of basements or lower floors. While they are not ground-breaking innovations, these practical measures can effectively safeguard properties.

A shift in buyer preference

“The recent flooding in the UAE has highlighted the vulnerability of villas, especially those on the outskirts of the region due to infrastructural issues. Single-storey villas are less flexible in being elevated above potential flood levels compared to multi-storey residences. Moreover, desert areas surrounding the UAE lack natural water absorption, leaving villas in these areas at higher risk of flooding,” elaborates Sankey.

He further adds, “With the predicted increase in frequency and intensity of storms due to climate change, as well as rising sea levels, villas face a double threat of flooding from intense rainfall and coastal surges. Against this backdrop, villas in well-drained areas with access to green spaces in the long run will be more attractive whereas villas located in flood-prone locations may find it difficult to draw buyers in the future.”

The recent heavy rains have highlighted regions with poor infrastructure, prompting increased government investment in drainage systems in these areas. “Newly developed areas like Creek and Meydan, with modern drainage solutions and higher elevations, have been less affected and may see an increase in demand. Properties around 30 metres above sea level are recommended for buyers. Despite a temporary dip in sales due to immediate disruptions from the rains, the overall impact on the real estate market has been minimal and is not expected to lead to long-term disinterest,” concludes Grigorian.

For a detailed perspective on the property market, visit:  Dubai - Real Estate Review Q1 2024