Dubai's cheaper communities record rise in property prices

Discovery Gardens, Motor City and Production City increase in value

Prices increased by 4.5% in Discovery Gardens. Ruel Pableo for The National

Dubai’s affordable residential market recorded growth in the second quarter, the first time it has done so since the onset of Covid-19, reflecting the sector's strong annual capital gains, a report by property consultancy ValuStrat has said.

The ValuStrat Price Index (VPI) covering Dubai’s residential market grew by 11.7 per cent annually and 3.4 per cent quarterly to 91 points, ValuStrat data shows.

Villa prices rose by 15.8 per cent annually and 4.3 per cent quarterly while apartment prices rose 8.1 per cent on an annual basis and 2.6 per cent quarter on quarter.

The affordable segment of the market recorded “evident growth for the first time since the pandemic”, with prices increasing by 4.5 per cent in Discovery Gardens, 4.3 per cent in Motor City, 3.9 per cent in The Greens and 3.4 per cent in Dubai Production City, the report said.

Meanwhile, Jumeirah Islands, with a price increase of 5.5 per cent, Palm Jumeirah (5.2 per cent), Dubai Hills Estate (5.1 per cent) and Arabian Ranches (4.6 per cent) were the best-performing areas during the quarter.

Prices in the prime segment of the residential market rose by 13.1 per cent annually and 3.9 per cent quarterly.

The VPI for prime villas hit a new 10-year high, registering 125.1 points with capital gains of 16 per cent year annually and 4.4 per cent quarterly.

Luxury villas cost 8.8 per cent more than they did in the middle of 2014, the report said.

“While highly desired prime-located apartments lagged behind their villa counterparts, annual gains accelerated to 11 per cent and quarterly growth doubled by 3.4 per cent,” the report said.

Dubai's property market has bounced back strongly from the coronavirus-induced slowdown, helped by government initiatives such as residency permits for retirees and remote workers.

The UAE move to expand the 10-year golden visa programme, the economic gains generated by Expo 2020 Dubai and higher oil prices also supported the property market's growth momentum.

Apartment prices in Dubai rose 8.1 per cent on an annual basis in the second quarter. Antonie Robertson / The National

Dubai is also the world's top market for $10-million homes as sales hit $3.1 billion in the first half of the year, edging past Hong Kong and New York, according to global property consultancy Knight Frank.

In the first six months, Dubai achieved 79 per cent of the total number of homes valued at $10 million-plus that were sold in 2022, according to the consultancy.

Off-plan sales volumes jumped 75.7 per cent annually during the second quarter, with the average ticket size of off-plan homes rising by 14.9 per cent to Dh2.41 million, the ValuStrat data showed.

Meanwhile, ready home sales transactions grew 11.8 per cent annually, equivalent to investments worth Dh32 billion.

The average ticket size of ready-to-move-in properties increased by 4.2 per cent annually to Dh2.68 million.

The number of new build residential units entering the market this year was estimated at 53,332 homes.

Total project completions as of the first half of this year stood at 12,599 apartments and 1,213 villas, equivalent to only 26 per cent of preliminary estimates for the whole of 2023.

Key off-plan projects launched include Sobha Reserve in Dubailand with 300 villas, Como Residences by Nakheel with 76 properties, Fashionz by Danube with 700 apartments and Azizi Grand in Dubai Studio City with 431 units.

Additional launches include Damac Bay 2 by Cavalli, Azizi Amber in Al Furjan, Morocco Cluster at Damac Lagoons and Armani Beach Residences on Palm Jumeirah.

The government has also revived the Palm Jebel Ali project after a pause of 14 years.

The master plan’s area is set to be twice the size of The Palm Jumeirah, encompassing 110km of beaches.

Office space in Dubai also recorded the highest annual capital gains of 26.2 per cent during the period, according to the ValuStrat report.