Dubai property prices continued to grow in July but are still some way below the market peak in 2014.
Average residential prices increased 9.9 per cent annually in July, with apartment prices up 8.7 per cent and villa prices rising 17.8 per cent, property consultancy CBRE said in its latest report.
On a monthly basis, apartment prices grew 1 per cent and villa prices rose 0.8 per cent in July, the report said.
“Despite the summer period, which usually has more subdued activity levels, sales activity in Dubai’s residential market remained buoyant in July 2022, with 6,524 units transacting in the month, up 50.8 per cent from a year earlier," said Taimur Khan, head of research, Middle East and North Africa at CBRE in Dubai.
Total transaction volumes in the year to July 2022 reached 45,793 — the highest recorded since 2009 over this period. Despite strong activity, average prices are below the peaks recorded in 2014.
Average rates per square foot of Dh1,114 ($303) for apartments and Dh1,335 for villas are 25.1 per cent and 7.6 per cent below the peak witnessed in late 2014, CBRE said.
Knight Frank meanwhile recorded a 10.1 per cent increase in average residential prices across Dubai at the end of the second quarter, and noted that "values are growing at a more sustainable rate".
The prime market in particular is strong, where demand has not only remained steady, but continues to intensify, it said.
Property prices in Dubai have been rising significantly since last year on the back of the UAE's broader economic recovery after the coronavirus-induced slowdown as well as initiatives such as the expansion of the country's Golden Visa programme.
Check apartment price rises and falls in the slideshow below:
Areas that recorded the highest price increases
The biggest price growths were again recorded in the emirate's most expensive areas, such as Palm Jumeirah, MBR City and Jumeirah Golf Estates, according to the CBRE report.
Villa prices on Palm Jumeirah have now risen by more than 4 per cent during each of the past four months.
Knight Frank puts Palm Jumeirah villa price growth at 51 per cent in the past 12 months and at 68 per cent since the onset of the pandemic.
Prices for villas in District One and Dubai Hills Estate expanded by 30 per cent in the past 12 months, it said.
“The severity of the shortage of new supply, combined with insatiable international demand has driven prime residential prices up by an extraordinary 70.3 per cent in the last 12 months," said Faisal Durrani, partner and head of Middle East research, Knight Frank.
"The caveat to this stellar growth is that average transacted prices in these exclusive precincts stands at Dh2,900 per square foot, or $800, making Dubai one of the most ‘affordable’ luxury residential markets in the world — it is in fact four times cheaper than prime neighbourhoods in New York, or London.”
During the first six months of 2022, Knight Frank recorded 82 ultra-prime deals — these are homes priced at more than $10 million. This compares with 93 ultra-prime deals in all of 2021.
In the affordable segment, data from EFG Hermes showed the market was down 10 per cent month on month in July to Dh9 billion owing to lower off-plan and ready-unit sales, although selling prices were up 5.2 per cent month on month at Dh1,560 per sq ft.
Are Dubai rents on the rise as well?
Residential rents are also up 23.7 per cent yearly, posting the highest rate of growth since May 2014, according to CBRE.
"In terms of the top three locations for apartment rental growth, in the 12 months to July 2022, rents in Palm Jumeirah, Downtown and Dubai Marina ... increased by 39.8 per cent, 38.4 per cent and 35.7 per cent on average respectively,” it said.
In the second quarter, rental growth on an annual basis stood at 15 per cent on average for apartments and 23 per cent for villas, property consultancy Asteco said.
It expects rental rates to “remain elevated” for the rest of the year, but growth is predicted to slow during an oversupply of units.