Apartments in Dubai record higher price gains thanks to strong demand in August

Apartment prices in Dubai rose alongside those of villas and townhouses last month, according to real estate consultancy ValuStrat.

The agency said in a new report that the apartment market witnessed capital gains of 1.5 percent per month and expanded at a record rate of 10 percent annually, the highest capital growth in a decade.

The research showed that apartments in Palm Jumeirah recorded the highest annual capital gains at 19.3 percent, followed by The Greens at 14.7 percent, Discovery Gardens at 14.1 percent, Motor City at 13 percent, and Jumeirah Beach Residence at 11.3 percent. .

“An increase in apartment sales has been observed in affordable and mid-range communities,” said Haider Toaima, Head of Research at ValuStrat.

“August saw International City ranked fourth among the locations with the highest number of ready-to-use home sales. Arjan ranked third for the highest number of off-plan registrations, while Business Bay broke its individual record for the first time with the highest number of off-plan properties in circulation.” In one month.

Dubai’s real estate boom won’t slow down anytime soon, according to property experts, as a rising population, low taxes and global economic climate continue to spark optimism.

Dubai’s real estate market has rebounded strongly from the coronavirus-induced slowdown, aided by government initiatives such as residence permits for retirees and remote workers.

The emirate’s move to expand its 10-year Golden Visa program, the economic gains achieved by Expo 2020 Dubai and rising oil prices also supported the real estate market’s growth momentum.

Residential property prices in Dubai rose by 17 percent in the second quarter year-on-year, recording expansion for the tenth consecutive quarter, amid strong demand and solid economic growth, according to a report issued by consulting firm Knight Frank last month.

The agency said that real estate prices in the period from April to June rose by 4.8 percent compared to the previous quarter.

Meanwhile, villa prices in Dubai rose 2.4 percent compared to July, and 18.2 percent since last year, according to the ValueStrat report.

“This is significantly lower than the 33.9 percent annual capital gains for villas that we saw during February 2022,” Toaima said.

The report showed that villas in Jumeirah Islands recorded the highest annual capital gains at 24.2 percent, followed by Palm Jumeirah at 22.1 percent, Dubai Hills Estate at 22 percent, and Emirates Hills at 20.6 percent.

Jumeirah Park, Arabian Ranches and Jumeirah Islands exceeded the highest price levels in 2014 by up to 3.2 percent.

Valustrat said off-plan contract registrations rose 13 per cent monthly and 40.8 per cent annually, representing a record three-year share of 63.5 per cent of total monthly sales.

However, prefabricated home transactions declined by 14.6 percent monthly and 26.2 percent annually.

The research showed that apartment sales dominated last month, accounting for 95 per cent of all transactions, 99 per cent of off-plan registrations, and 88 per cent of ready home titles.

The most important sites that were dealt with on the map last month included projects in Business Bay, Jumeirah Village, Arjan, Sobha Hartland, and Dubai Port.

ValuStrat said the majority of ready homes sold in August were in Jumeirah Village, Dubai Marina, Business Bay, International City and Downtown Dubai.

Properties developed by Emaar (10.9 percent), Damac (10.5 percent), Sobha (8.7 percent), Danube (5.6 percent) and Nakheel (5 percent) topped the sales lists.

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Separately, global real estate consultancy CBRE said in a recent report that the total transaction volume in the Dubai residential market reached 11,328 in August, the second highest monthly figure recorded so far and an increase of 22 percent compared to the previous year.

The consulting company added that in the period from the year to August, a total of 79,605 transactions were recorded, the highest level recorded during this period.

In the 12 months to August, average prices rose 19.6 per cent. During this period, average apartment prices increased by 20 percent and average villa prices increased by 17.3 percent.

Average apartment sales prices are 9.6 percent lower than the corresponding peak in 2014, while average villa sales prices are 8.7 percent higher than their level in 2014, according to CBRE results.

In the residential apartments sector, Downtown Dubai recorded the highest sales rate per square foot at 2,460 dirhams, while Palm Jumeirah in villas recorded the highest sales rate per square foot at 4,915 dirhams.

“In the rental market, we are still seeing a slight moderation in the growth rate,” said Taimur Khan, head of Middle East and North Africa research at CBRE in Dubai.

“Average rents in Dubai rose by 21.7 per cent during the year to August. During this period, average apartment rents rose by 21.5 per cent, and average villa rents rose by 22.6 per cent.

Updated: September 16, 2023 at 7:50 AM