Capital values for villas in Dubai showed the best performance during the second quarter since 2014, with the highest annual capital gains recorded in The Meadows, Arabian Ranches, The Lakes, Jumeirah Islands, Dubai Hills Estate and Mudon, according to a report by real estate consultancy ValuStrat.
The ValuStrat Price Index (VPI) for Dubai grew 3.8 per cent during the second quarter, compared with the last quarter, wiping out nearly all capital losses in 2020.
Villas, which account for 13 per cent of the residential market in Dubai, spearheaded the growth with a quarter-on-quarter increase of seven per cent and year-on-year rise of 6.3 per cent, the report said.
VPI is a valuation-based index that tracks change in capital values for a representative fixed basket of properties.
Apartment capital values in the emirate grew 1.7 per cent in the second quarter from the previous three months, but declined 4.8 per cent compared with the second quarter of 2020, ValuStrat said. Jumeirah Beach Residence, Palm Jumeirah, Downtown Dubai and The Views were the best performers.
By contrast, apartment capital values in Jumeirah Village, Dubai Marina, The Greens and Dubai Production City recorded a weaker quarterly performance. However, compared to 2020, apartments in International City, Palm Jumeirah, Jumeirah Beach Residence, Al Furjan, and Al Quoz Fourth, have written off their capital losses of last year.
The real estate market in the UAE slowed in the wake of a three-year oil price shake-up that began in 2014 and an oversupply of properties. The coronavirus-induced economic slowdown further pressured the market in 2020.
ValuStrat's findings echo a report last week by listings portal Property Finder that showed sales of ready villas and townhouses in Dubai jumped more than threefold during the first quarter as residents sought more spacious homes during the coronavirus pandemic.
Dubai, the commercial and tourism centre of the Middle East, is also recording a sharp increase in the sales of homes valued at more than $10 million, consultancy Knight Frank said last month. It cited the emirate's return to normal ahead of other cities after a wave of global lockdowns and the UAE's rapid vaccination campaign.
Dubai was one of the first cities to reopen its borders to international tourists in July 2020 as the UAE embarked on one of the world's fastest Covid-19 inoculation drives, stimulating economic activity and the return of overseas visitors.
New initiatives, such as visas for expatriate retirees and the expansion of the 10-year golden visa scheme, are expected to support the local real estate market, analysts say.