The value of luxury homes in the UAE’s two largest cities, Dubai and Abu Dhabi, expanded at the fastest pace since 2015 in the third quarter.
The surge in sale comes as the country's residential property market continues to recover from the impact of the Covid-19 pandemic.
Villa prices in Dubai have increased 16.5 per cent year-on-year, according to provisional data for third quarter from global property consultancy Knight Frank. Residential values in Abu Dhabi also climbed two per cent compared to the corresponding period last year, it said in a report on Wednesday.
“The market is roaring back to life," Faisal Durrani, partner and head of Middle East research at Knight Frank, said. "The emerging euphoria around the fact that the UAE has the pandemic so well and truly under control, coupled with the excitement around the much-anticipated Expo 2020 Dubai are adding to the confidence that is taking hold in the residential market."
The UAE has undertaken one of the world's fastest Covid-19 inoculation drives, stimulating economic activity and the return of overseas visitors, as it sought to balance protecting public health with the safe re-opening of its economy.
The UAE’s rapid response to the Covid-19 pandemic has attracted the world’s wealthy investors, who continue to flock to Dubai, snapping up the most expensive homes in locations such as the Palm Jumeirah and Jumeirah Bay, according to Knight Frank. This has played a big part in driving up villa values, it said.
Villa prices in Dubai are provisionally up by 5 per cent in the third quarter of 2021, the report shows.
The number of homes worth more than $10 million that have been sold in the emirate currently stands at 54, breaking the previous record of 31, set in 2015.
The Palm Jumeirah and Emirates Hills account for almost 75 per cent of super prime home sales in the city, but new sub-markets in Dubai such as Business Bay have also joined the list of locations for homes worth more than $10m.
"It was only a matter of time before the ‘halo-effect’ from Downtown Dubai spilled over to surrounding markets, highlighting that not only is Dubai’s super prime market expanding, but it is also maturing," Mr Durrani said.
Luxury home prices in Abu Dhabi are also climbing, with residential values overall at their second consecutive quarter of positive year-on-year increases, according to Knight Frank’s analysis.
Residential values in the UAE capital are now 2 per cent higher than they were a year ago, with villas experiencing stronger price growth of 3.1 per cent compared with apartment prices growing at 1.8 per cent, the report said.
“As has been the case throughout the pandemic, existing and aspiring home-owners have their eyes firmly set on larger homes, whether for more room for a home office, or access to extra space, indoors, or outdoors," Mr Durrani said.
More UAE residents are in search of bigger homes as the pandemic normalised trends of remote working and home-schooling.
"It really is a case of bigger is better, as has been reflected in recent rapid off-plan villa sales projects in Abu Dhabi," Mr Durrani said. He quoted the examples of Aldar’s 480-villa Noya Viva development on Yas Island, which sold out in 48 hours in April, and the recent sale of all 83 villas at Saadiyat Reserve the Dunes.