Why do Investors like Jumeirah Village Circle (JVC)?

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To many outsides of the UAE, Jumeirah Village Circle (JVC) isn’t particularly synonymous with Dubai as Dubai Marina and Downtown Dubai are, at least when it comes to being a tourist-heavy area. On the other hand, many Dubai residents consider JVC as a very well-known non-tourist spot to live in.

Developed by Nakheel, one of the leading developers, JVC, is an affordable, family-friendly, residential and commercial area of the city that provides its residents with a peaceful community whilst still being at the heart of nearby hot spots. The area is made up of over 2,000 residential units in the form of townhouses, apartments, villas, and commercial buildings, which are fashioned as a series of villages connected by parks and canals. According to our inaugural report, JVC is considered to be one of the best areas for property investment in Dubai.

JVC attracts a mix of families, young couples, and bachelors as it has an abundance of schools, parks, and fitness centers. Most JVC residential apartments come with shared amenities like gyms, pools, and launderettes. The area now boasts its own mall, Circle Mall, as well as community clubs, restaurants, supermarkets, and schools – making it an even more attractive place to live. Jumeirah Village Circle is located between the E44 and E311 highways, commuting is hassle-free as popular locations like Mall of the Emirates, Dubai Media City, Dubai Marina and Dubai Internet City are within a 20-minute drive away. It is also part of a growing ecosystem of communities such as Jumeirah Village Triangle, Al Barsha, Emirates Hills, and the upcoming EXPO 2020 site. 

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As the area is rapidly developing, JVC has a range of brand new apartments for rent. The community offers a wide range of low and high rise developments, and according to the 2019 H1 Dubai Real Estate Report from Bayut, it is one of the most popular areas in Dubai to buy and rent both apartments and villas – perhaps due to its lucrative pricing and high rental yields.

Over the past few years, Jumeirah Village Circle (JVC) has been one of the most transacted areas in all of Dubai, both in off-plan and secondary markets. As one of the most affordable new areas in the city, it’s popular among residents looking for high-quality and affordable living spaces – as well as investors looking to capture high returns.

The area has seen a substantial rise in the number of residents in recent years, which is in part due to the growing number of completed complexes and a more finished feel around the community. It has also seen a number of individuals move from areas such as Dubai Marina – wanting to escape the daily traffic in replacement for somewhere more accessible, but with a strong network of amenities in close proximity. The chart below reflects the increase in popularity of the area with the population growing from under 9K in 2016 to over 26K in 2020.

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JVC was launched in 2011 near the bottom of the market and saw a steady increase in property prices until 2014 – when the Dubai property market began entering a bear market. As the community is relatively new and attracts a broad range of residents, the prices have declined the least in all of Dubai since the last cycle peak in 2014. As seen in the graph below, the YoY change in JVC prices vs Dubai clearly indicates that JVC held up quite well despite the overall Dubai property market’s price decline. In the current market climate, new and affordable areas will continue to attract investors and residents, providing support to both rental and property prices.

JVC prices peaked in 2014 at AED 961 PSF and increased by 52.6% from its 2010/2011 bottom. The prices over the past 6 years have corrected approximately 18-20% and according to recent transaction data, as well as independent analysis, it appears they are now on the path to recovery. In the last nine months, JVC studio prices are up 14% on average, as well as being up 3% in the last quarter, alone. Moreover, studios in JVC make up a mere 1.5% of the upcoming supply in the area.

The table below provides an overview of how the various Dubai real estate cycles have affected property pricing across Dubai and JVC since the last market-wide bottom in 2011. Assuming a 6% net return p.a for Dubai and a 7% net return p.a for JVC, investors that acquired units in the latter during 2011 and continued to hold, would have benefitted from a strong, annualized return in the region of 6.9%. 

Recently, JVC’s off-plan project activity has started to plateau as projects are being handed over and fewer new projects are being announced. The increased demand in secondary transactions and limited new supply is starting to affect the PSF as it has picked up in the last quarter.

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The total value of transactions for off-plan properties has also been on the rise since bottoming out in Q4 2019. The increased activity is from old projects being handed over.

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The median price per square foot has been correcting for some time, which is in line with the overall market’s trajectory but is now showing signs of some improvement. With supply issues being curtailed and demand continuing to increase, the prices can be expected to stay on par or slightly increase from here on out.

Now that you are familiar with the area, why not take a look at our platform for properties in JVC? 

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