The Dubai residential property market has witnessed an extraordinary price surge during the third quarter of the year, marking the most significant quarterly increase in a decade. A report by ValuStrat, a prominent property consultancy, reveals that this remarkable upswing can be attributed to heightened demand within the emirate’s real estate sector.
The ValuStrat Price Index (VPI), which closely monitors Dubai’s residential property market, showed an impressive 6.1 percent increase on a quarterly basis in the third quarter. The report further detailed that villa prices soared by an impressive 7.6 percent, while apartment prices also recorded a notable increase of 4.8 percent during the same period.
Looking at the broader picture, the VPI experienced an astonishing 15.1 percent increase annually. Villa prices surged by an impressive 19.8 percent, while apartment prices rose by 11 percent in the past year.
When analysing specific areas, it is noteworthy that The Palm Jumeirah, Jumeirah Islands, Dubai Hills Estate, and Mudon emerged as top performers regarding capital gains within the villa segment during the quarter. Meanwhile, the apartment category saw Discovery Gardens, The Greens, The Palm, and Dubailand Residence Complex securing their place as the best-performing areas.
Even prime properties enjoyed significant capital gains in the third quarter. Property valuations in this category increased by a substantial 16.5 percent annually and an impressive 6.6 percent every quarter, according to ValuStrat’s report.
The ValuStrat Price Index for prime villas soared to a new 10-year high, with a remarkable 20.2 percent increase year on year and a notable 8.5 percent increase per quarter. In terms of prime apartments, valuations increased by 13.6 percent annually and 5.2 percent quarterly.
Dubai’s property market has demonstrated a robust rebound following the slowdown induced by the COVID-19 pandemic. Multiple government initiatives significantly bolstered this recovery, including the introduction of residency permits for retired and remote workers and the expansion of the 10-year golden visa program.
The positive economic impacts of Expo 2020 Dubai, and higher oil prices have further supported the growth momentum in the property market.
Notably, Dubai’s non-oil private sector economy continued to exhibit strong business activity in September, with sales growth reaching its highest point in more than four years. The seasonally adjusted S&P Global purchasing managers’ index rose to 56.1 in September, marking its most robust performance in three months.
Recent government data reveals that Dubai’s economy expanded by an annual rate of 3.2 percent in the first half of 2023, reaching a total of Dh223.8 billion ($60.9 billion). The robust performance of the transport and storage sector largely drove this growth.
The data from ValuStrat indicates that during the third quarter, Dubai recorded 11,308 ready or secondary home sales transactions, marking an impressive increase of 17.7 percent compared to the same period last year. These transactions amounted to a total investment value of Dh26.4 billion.
Interestingly, the average ticket size for ready-to-move-in properties decreased by 1.4 percent annually, reaching Dh2.3 million. A significant portion, approximately 41.5 percent, of all ready home sales, were priced below Dh1 million.
The report also shows that, in the luxury property market, 52 home sales exceeded Dh30 million during the third quarter, compared to 67 in the same period the previous year.
During the third quarter, the average transacted price for ready units across the city reached Dh14,077 per square meter (Dh1,308 per square foot), marking a remarkable 7.8 percent annual increase. The majority of transactions took place in popular areas such as Jumeirah Village, Dubai Marina, Business Bay, Downtown Dubai, and International City.
Meanwhile, the average ticket size for off-plan homes experienced a notable 13 percent annual increase, reaching Dh2.5 million. The citywide average transacted price for off-plan properties stood at Dh20,035 per square meter.
The report also mentioned that during the third quarter, Mudon, Business Bay, and Dubailand Residential Complex achieved their highest monthly records, trading the most off-plan properties.
Off-plan Oqood, or contract, registrations rose by 19.1 percent annually, equivalent to Dh36.9 billion worth of investment.
Notably, residential rental values in Dubai surged in the third quarter, with asking rent increasing by an impressive 27.2 percent when compared to the same period last year. Villa rents experienced a remarkable annual increase of 38.7 percent, while apartment rents rose by 19.1 percent.
Based on developer completion schedules, the report estimated that approximately 53,715 new build units would enter the market during the year. During the first nine months of the year, a total of 21,507 apartments and 2,068 villas were completed, accounting for 44 percent of the preliminary estimates for the entire year.
The office property sector also experienced growth, with office sales transactions increasing by 9 percent year on year to reach 631 transactions during the third quarter. The median transacted price was Dh11,140 per square meter, marking a significant 28.4 percent annual increase. In terms of sales volume, Business Bay remained the most preferred choice for office sales, with approximately 44.5 percent of the overall transactions, followed by Jumeirah Lakes Towers, with a 33 percent share of the market.
Original article reference: The National News.