Property prices across Dubai grew 33.4 per cent in January to an average of Dh1,575 per square foot, as the residential market remained resilient amid a strong economic recovery in the emirate.
Prices of properties within the luxury segment rose 35.1 per cent while the affordable and budget categories registered growth of 37.2 per cent and 15.7 per cent respectively, on an annual basis, a report by EFG Hermes showed.
Total transaction volumes in Dubai slid 24 per cent during the month to 20,844, "mainly due to an exceptionally high land activity in the comparable month".
Residential market activity also dipped about 13 per cent, owing to fewer mortgages, but off-plan sales surged four times, buoyed by deals in areas such as Dubai Harbour and Business Bay.
Dubai is among the major global housing markets that have benefited from an upsurge in the global economy, which is gradually shaking off the impact of the Covid-19 pandemic on the back of improving business conditions and bullish markets.
Dubai registered 84,196 property transactions worth Dh300 billion ($82bn) last year, the highest annual value recorded in the emirate’s history, figures released by the Dubai Land Department show.
The number of property transactions in 2021 grew annually by 66 per cent, while values increased by 72 per cent.
The luxury homes segment grew 32 per cent to reach 4,083 deals in January, compared to 3,100 transactions the same period last year, said EFG Hermes. The high-end market was also up 10 per cent month-on-month in January, continuing the momentum witnessed last year.
The affordable and budget sectors dipped slightly to 5,340 and 3,733 deals respectively during the month.
The best performing areas in terms of prices were Jumeirah, Mohammed Bin Rashid City and Palm Jumeirah.
The recovery in the rental market is "still intact", with Downtown Dubai and Palm Jumeirah emerging as the best performing areas, EFG Hermes said.
The property market in the UAE, the second-largest Arab economy, has made a strong recovery from the pandemic-driven slowdown as conditions improve on the back of fiscal and monetary measures.
Pent-up demand and improved investor sentiment have also helped to drive property sales in Dubai and Abu Dhabi.
New initiatives, such as visas for retired residents and the expansion of the 10-year golden visa scheme, are expected to support the local market, say industry experts.