Property prices in Dubai increased by an average of 14.5 per cent annually in April as sales of residential units continued to rise, driven by the off-plan market.
Average apartment prices rose by 14.5 per cent to Dh1,256 ($342) per square foot and average villa prices by 14.9 per cent to Dh1,484 per square foot in the year to April, property consultancy CBRE said in its latest Dubai Residential Market Snapshot report.
Sales rates also rose on a monthly basis, with apartment rates up 1.8 per cent and villa rates growing 2 per cent, it said.
While average apartment sales rates across the emirate are still 15.6 per cent below record levels posted in late 2014, several neighbourhoods have already surpassed 2014 levels.
Average villa sales rates, meanwhile, are now 2.7 per cent above their 2014 peak, the study showed.
Jumeirah remains the most expensive area to buy in the apartment segment, with the price per square foot at Dh2,367, the report said. This is, however, down 3.1 per cent from March.
For villas, Palm Jumeirah registered the highest sales rate per square foot at Dh4,635, which is up 4 per cent on a monthly basis.
Downtown Dubai, Palm Jumeirah, Dubai Hills Estate and The Old Town made up the five most expensive areas for apartments, while Jumeirah, Emirates Hills, District One and Jumeirah Islands were the highest for villas, CBRE said.
Total property transactions in April stood at 7,615, which is a 16.2 per cent increase from the year-ago period. That brought 2023's total to 36,946, a 43.2 per cent rise compared with the same month in 2022 — a record for the first four months of any year so far, CBRE said.
The growth was underpinned by activity in the off-plan market, which posted a 42.5 per cent growth in sales. This offset weakness in the secondary market, where sales declined 2.4 per cent.
“Activity levels in Dubai’s residential market remain steadfast,” Taimur Khan, head of research for Mena at CBRE, said.
“On a monthly basis, a deceleration in activity levels has been witnessed following the record figure registered in March 2023. Despite this — and on the back of this elevated demand — average residential prices in Dubai continue to register significant increases.”
Dubai's property market made a strong recovery from the coronavirus pandemic last year as the emirate's economy rebounded on higher oil prices and government policies, including changes to visa rules to attract more investment.
Last year, the value of property deals in the market reached a new high of Dh528 billion, up 76.5 per cent annually, while the number of transactions rose 44.7 per cent to 122,658 year on year.
The sector's “exceptional performance” will help Dubai to achieve its vision to be “one of the world’s top three cities”, Crown Prince Sheikh Hamdan bin Mohammed said in January.
“The results also support the goal of the Dubai Economic Agenda D33 … to double the size of Dubai's economy by 2033. The sector is a pillar of Dubai's strategy for sustainable development and a vital driver of its 2040 Urban Master Plan.”
Dubai remains one of the world's most attractive investment destinations because of its stable economy, strong financial fundamentals and ability to find opportunities for growth, Sheikh Hamdan said.
In the rental market, average rents in 2023 through to April jumped by more than a quarter, as average apartment and villa rents surged by 25.7 per cent and 26.1 per cent, respectively.
The average annual apartment and villa rents stood at Dh102,675 and Dh308,616, respectively, in April.
The highest average annual apartment rents were found in Palm Jumeirah at Dh263,762.
In the villa segment, peak average rents were in Al Barari at nearly Dh1.008 million, CBRE said.
Rents have been rising due to an influx of high-net-worth individuals into the city, as well as the introduction of new visa programmes that encourage residents to stay longer or move from abroad.
“Looking at the rental market, we have started to see a slight moderation, where the growth rate has tapered off for the third consecutive month,” Mr Khan said.