Dubai real estate continued to rise in terms of demand and prices, as transaction volumes have also grown after a strong rebound from the coronavirus-induced temporary halt.
The demand for properties for sale in Dubai has tremendously increased over the past 12 months. Average residential property prices have increased by 10.9 per cent in the past 12 months to May 2022, with apartment prices rising 9.6 per cent and villa prices up by 21.0 per cent.
The total number of transactions touched the figure of 5,542 in May 2022, which is around 33 per cent up compared to the numbers recorded a year earlier.
According to CBRE research report, “Transactions in Dubai real estate market continue to remain positive, with total transaction volumes in the year till May 2022 reaching 30,903. It was the highest total recorded for properties for sale in Dubai, since 2009. With the rise in transactions, price growth remained positive – despite the rate of growth slowing marginally from a month earlier.”
An incredible increase in demand for prime properties in Dubai has been recorded in the past 12 months. This thriving market has led to the rise in prices by almost 60 per cent during the same period, driven by the growing interest from both local and foreign investors.
A few luxury communities in Dubai that are in higher demand nowadays include Palm Jumeirah, Emirates Hills and Jumeirah Bay Island.
The prices for luxury villas in Palm Jumeirah increased around 11 per cent during the first quarter of 2022 and more than 38 per cent over the past 12 months. The villa prices in Emirates Hills increased by 6.5 per cent in the first quarter of the current year and almost 20 per cent in the last year.
According to Faisal Durrani, head of Middle East research at Knight Frank, “Palm Jumeirah and Emirates Hills continue to cement their iconic status, with global buyers continuing to jostle for an address in Dubai’s most exclusive enclaves.” “In addition, there were a record-breaking 93 ultra-prime home sales in 2021 — these are homes priced at over $10 million. During Q1, we’ve recorded another 32 ultra-prime deals, exceeding the second best annual total set in 2015.”
Backed by fiscal and monetary measures, the UAE economy improves from the pandemic-driven slowdown and resultantly, the Dubai real estate market has made a strong recovery.
According to Mo’asher, the emirate’s official sales price index issued by the Dubai Land Department in partnership with Property Finder, the market registered 25,972 property transactions in the first quarter of 2022, which is the highest number of quarterly deals since 2010.
A number of new records have been registered in the Dubai property market in recent months. Recently, an apartment located at the Bulgari Resort and Residences is sold for the highest price per square foot in Dubai. Also, a 10-bedroom, custom-built villa with 70 metres of private beachfront on Palm Jumeirah sold for a record AED280 million, beating the previous record of property sold for AED185 million in 2015.
“The positive market sentiment, driven by the government’s timely response to the pandemic, coupled with the successful hosting of the World Expo, the reopening of travel corridors and Dubai’s global safe-haven status, continues to underpin the market’s rebound,” stated in Knight Frank’s report.
However, it is notable that despite the sharp turnaround in prices, the values of properties for sale in Dubai are still about 25 per cent below their 2014 peak, while villas are now just 12.9 per cent below the last market high in 2014.
More than 100,000 property units are expected to enter the market by the end of 2025, with more than 50,000 units to be completed during 2022. Interestingly, out of all these property units planned for Dubai real estate market, only 25 per cent are forecast to be luxury villas for sale in Dubai.
According to Knight Frank, “Through to the end of 2025, just eight new villas are expected to be built in Dubai’s prime residential areas, hinting strongly at continued outperformance of villas at the very top of the market as there is nothing to suggest an easing of the luxury home drought any time soon.