Dubai property prices continued to rise in August, with transaction values also increasing despite a challenging global economic backdrop.
Average apartment prices were 7.7 per cent higher annually last month while villa prices rose by 15.8 per cent annually, according to data from property consultancy CBRE.
On a monthly basis, apartment prices were up 0.5 per cent compared with July and villa prices rose by 0.3 per cent.
The average rates are still well below the peak of 2014, with apartments 24.7 per cent cent lower and villa prices down 7.3 per cent, CBRE said.
The Dubai property market has witnessed a year of rampant price growth 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.
“August’s total volumes of transactions in Dubai’s residential market reached 9,257, the fifth highest monthly total ever recorded,” said Taimur Khan, head of research for the Mena region at CBRE in Dubai.
“Transactional activity in the sector is continuing to defy both a challenging global economic backdrop and what is usually is a more subdued period for transactional activity.”
It reported a rush of mortgage borrowers opting into fixed-rate products, hoping to stabilise their housing costs.
“First-time homebuyers are actively considering a house purchase to provide more stability to their families due to high rental prices that have skyrocketed throughout the city,” said Mohamad Kaswani, managing director of Mortgage Finder.
“Additionally, as demand for residential properties continues to rise, many tenants find themselves pressured to purchase the properties they are residing in to alleviate the stress resulting from landlords demanding higher rental prices.”
Dubai property prices experienced their slowest monthly growth rate in 18 months in August, according to a report by property consultancy ValuStrat.
“The villa submarket continued to perform, albeit at a slower 1.3 per cent month-on-month expansion,” its August report said.
Check apartment price rises and falls in the slide show below:
Areas that recorded the highest price increases
On the apartments side, Remraam and Dubailand Residence Complex recorded the biggest monthly price increases at 4.8 per cent while villas at Falconcity of Wonders also registered a similar increase in value.
The prime areas of Dubai also continued to record growth, with Jumeirah apartments up 3.4 per cent, month on month, and Palm Jumeirah villas up 2 per cent.
However, prices in typically popular areas such as Dubai Marina and Jumeirah Lakes Towers fell, as they did in the villa segment in Jumeirah, Jumeirah Golf Estates and District One.
In the apartments segment of the market, Jumeirah registered the highest average sales rate per square foot at Dh2,152 ($586), while in the villas segment, The Palm Jumeirah registered the highest average sales rate per square foot at Dh3,588.
Are rents on the rise as well?
Yes, significantly. Average apartment rents were up 24.9 per cent year on year while average villa rents increased by 24.2 per cent, CBRE said.
The highest annual apartment rents were at Palm Jumeirah (Dh222,870) while Al Barari had the highest villa rents (Dh935,046) in August.
However, the rate of rental growth is slowing.
“The growth rate of rents, on a month-on-month basis, has slowed for three consecutive months now, indicating we may see the rental growth rate start to moderate in the not too distant future,” said Mr Khan.
Villa rents in Emirates Hills in August were up 4.7 per cent month on month while Victory Heights villa rents rose 4.3 per cent during the same period.
Apartment rents rose in all areas of the city, except the Dubai International Financial Centre, Dubai Sports City and the Dubailand Residence Complex.