Q1 data shows Dubai property market performing well for investors

Both apartments and villas have recorded strong annual capital gains through Q1 as Dubai’s property market continues to record strong investment returns since the end of global lockdowns.

The latest report from ValuStrat suggests the villa market saw values increase by over 17% in the first 3 months of 2023, while the average apartment in Dubai recorded capital gains of 6.6% during the same period.

Investors with assets in The Palm, Jumeirah Beach Residence, The Greens and Discovery Gardens observed the highest average level of capital growth in the quarter. 

Market stabilisation

“The month of March observed capital gains of typical villas stabilise, whilst apartments witnessed marginal acceleration for the first time since the pandemic,” ValuStrat stated.

For context, the villa market represents less than 15% of the Dubai property market, but it saw a huge surge in demand following the onset of the pandemic in 2020. High-net-worth individuals from all over the world looked to purchase spacious and luxurious villas in Dubai – particularly The Palm – and asking values soared 50-100% very quickly.

Now, most analysts suggest the villa spurt is over and the market will once again be more weighted towards apartments.

Underlying strength and off-plan activity

The latest official data confirms the Dubai property market is performing well, 2 years after covid instigated this 3rd growth cycle. Over AED 150 million was invested into the market in Q1, which is an 80% year-on-year rise.

The ValuStrat data also noted the rising level of off-plan activity, and the upcoming opportunities open to investors: almost 56,000 new properties have been placed on the market so far in 2023.

Current notable completions include Summer at Creek Beach development with 298 units, the Sunset at Creek Beach project (536 units), Waves Tower in Sobha Hartland (414 units), Binghatti Creek at Al Jaddaf development (400 units) and Azizi Berton in Al Furjan (245 units).

In the remaining 3 quarters of the year, almost 50,000 apartments remain under construction with over 50% of them located in Mohammed bin Rashid City, Dubailand, Jumeirah Village Circle and Business Bay.

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