All about Middle East, Gulf and Dubai: Now living in Villas is preferred over apartments in UAE

With price differences blurring, families are now in a position to look beyond luxury apartments

The idyllic villa lifestyle is finally within the reach of many families who earlier had no choice but to opt for apartment complexes. Rolling lawns for the children to play on, a garden where you can relax and savour canapés, a private pool and a jacuzzi to splash around in, ample plot space for your pet to run around, barbecue decks to entertain friends — all this and more is no longer a mirage. Courtesy of the market correction and rental freefall, comparable price scales are blurring the differences between luxury apartments and villas.

Ask Jude Tartkoy, who has leveraged the price decline to upgrade from her three-bedroom apartment in Jumeirah Beach Residence (JBR) to a three-bedroom villa in Al Reem 1 in Arabian Ranches. "It was getting too noisy to live near the JBR Walk, with the young crowd partying all night long. We were seeking a quiet lifestyle with a good community feel," says Jude.

Buyer demographic

It's mostly families, retirees and high-salaried senior management who look to buy villas. Also there are those investors who're seeking rental yields, but owing to the size, the cash flow required for the deal is much more than that for securing an apartment.

Vivian King, marketing director, daGama Properties says, "We have several investors who own up to ten villas in Arabian Ranches and The Meadows. Their rental yields have been very favourable. Some of our clients have chosen to rent in the nearby MotorCity apartments and let their villas for a nice profit, which helps them pay off their mortgages."

The political unrest in the wider Middle East is also bringing in investors who are looking to park their funds in long-term villa investments. Linda Muldoon, managing partner, Gulf Platinum Properties, explains, "There are many cash buyers around who want villas for their families in the future. Villas are achieving as much as 7 per cent yields."

While only penthouses and luxury apartments can compete on a similar price scale with villas, ultimately, it's a choice between the different lifestyles that the units offer. While singles, executives and young couples opt for apartments, it's growing families who prefer the extra space that comes with leasing or buying a villa.

Limitations of an apartment purchase

"An apartment offers a great lock-up-and-go lifestyle for families that do not want the hassle of a garden," says Vivian. "A limiting factor may be that you cannot make as many changes to the apartment and exterior as you wish to. Also, the apartment's policy on pets may sway your decision."

From an investment perspective, it makes sense to go for villas owing to the supply-demand fundamentals. While there is limited supply of villas in prime locations, the overhang of apartments in Dubai has been much written about. Says Riad, "The annual service charges of villas range between Dh2 and Dh5 per square foot whereas for apartments, it starts at Dh9 and could reach up to Dh25 per square foot."

It also helps to check the developer's track record and upkeep ability. "When you own your own villa, it is easy to make alterations. Some developers have set rules on exterior areas to limit ruining the image of the development," contends Vivian.

The flip side of a villa lifestyle

"The children have a large garden all to themselves and a home theatre, which wasn't possible in an apartment. It's also more practical to have a pet in a villa," says Seetha. On the downside, living in a villa necessitates the presence of domestic maids and adequate security, especially when the family is travelling. "The children also miss their friends from the earlier apartment tower. In a villa, it's a challenge to keep them engaged. They have a tendency to watch TV a lot more," Seetha says.

Though apartments always trump villa transactions, the average apartment in Dubai is quite small and doesn't fit family requirements. Vivian observes, "Some people prefer living in a villa in a quiet neighbourhood while others like the hustle and bustle and would rather live in a spacious luxurious penthouse with a full sea view."

Housing allowance used to rent villas

Villa communities also figure on the leasing radar of high-level executives who add to their annual housing allowance to trade up living space. "In most cases, the tenants would have to raise additional funds, up to Dh50,000 a year, in order to rent in areas like The Lakes and The Meadows," says Riad. The average housing allowance for these executives in Dubai is Dh250,000 per annum. "A lot of medium- to high-ranking managers and pilots have chosen Arabian Ranches as their favourite rental area, with The Meadows, The Springs, Green Community, MotorCity and Victory Heights next on the list," says Vivian.

Data compiled from real estate agencies suggest that a four-bedroom villa in Jumeirah Islands can be rented for Dh260,000 per year, a two-bedroom town house in the Arabian Ranches is pegged between Dh80,000 and Dh120,000 (depending on location, view and size of plot and if there are upgrades in the house).

Podium villas in Dubai Marina could fetch up to Dh300,000 per year. "These are, however, very few and almost never available for rent," says Fine & Country's Riad.

Villa rentals