Dubai villa prices in prime areas recorded significant increases in June as transactions in the wider market stayed close to historical highs.
Average residential property prices increased 10 per cent in the year to June, with apartment prices nearly 9 per cent higher on average and villa prices increasing 19 per cent, CBRE said in its latest Dubai market report.
Month on month, apartment prices across Dubai edged up 0.1 per cent, while villa prices gained more than 1 per cent.
“Transaction activity in Dubai’s residential market continues to remain near historical highs, with total transactions in the year to date to June 2022 reaching 38,901," said Taimur Khan, head of research for the Mena region at CBRE. "This is the highest total recorded since 2009, over this period."
Mortgage transactions were steady despite recent interest rate increases in the UAE.
"Dubai's real estate market shows no signs of slowing down despite the challenges posed by global tensions and inflation," said Elias Hannoush, managing director of Morgan's International Realty.
"Since the end of Covid restrictions, the average transactional price per square foot has been steadily increasing, and this quarter was no exception."
Check apartment price rises and falls in the slide show below
Where were the highest price increases in Dubai?
The likes of Palm Jumeirah, Emirates Hills, District One and Dubai Hills all recorded increases of more than 4 per cent month on month.
June was the third month running that Palm Jumeirah had an increase of about 5 per cent on the month previous, as demand outstrips supply at the top end of the market.
Palm Jumeirah has the highest price per square foot for villas at Dh3,365.
In the apartment segment, Dubai Silicon Oasis recorded a 3.6 per cent rise in June, while Jebel Ali registered about a 4 per cent increase, CBRE data showed.
June was the highest month yet for Dubai sales value at about Dh23 billion ($6.2bn) — about 55 per cent higher in overall value year on year when compared with June 2021, according to Dubai Land Department data. As of July 1, 71 per cent of the total sales volume of 2021 had been reached.
"The Dubai real estate market has not disappointed us this year with consistent growth month on month and quarter on quarter despite global and local macroeconomic conditions," said Lynnette Sacchetto, director of data and digital transformation at Allsopp & Allsopp.
There was notable growth in June, month on month, when compared with May of this year with a 33 per cent increase in real estate volume and 24 per cent increase in value.
There was also 9.5 per cent increase quarter on quarter in real estate volume and about a 7 per cent increase in value compared with Q1 2022.
"I do not foresee these trends slowing down or shifting any time soon,” Ms Sacchetto said.
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How high will Dubai property prices go?
A new record was set earlier this year when a Palm Jumeirah villa sold for Dh280 million. Brokers recently told The National there is a good chance a sale of more than Dh300m will be achieved.
Dubai's prime property sector is cheaper than other major cities around the world ― $1 million buys you 1,330 square feet in Dubai, four times more than you would be able to secure in London or New York.
Government initiatives, such as the expansion of the 10-year Golden Visa programme and new types of residence permits for retirees and remote workers, have contributed to price increases, while the swift and effective Covid-19 vaccine campaign has given investors a safe haven perception of the UAE.
"An effective vaccination programme led to one of the highest coronavirus inoculation rates globally, allowing the country to reopen for international business and tourism earlier than most countries," Fitch Ratings said.
"In addition, government initiatives to boost growth and competitiveness, including liberalised visa and residency rules, helped to increase the population."
