The prices of apartments and villas in Dubai rose in the first quarter, indicating a broader recovery in the property market as the economy rebounds from the coronavirus pandemic, according to a new report from Asteco.
Apartment prices in the emirate increased 3 per cent on a quarterly basis, while prices of villas jumped 6 per cent during the period, the report said. On an annual basis, prices dropped 2 per cent but villa prices increased 3 per cent.
“The villa segment witnessed a marked increase [in demand],” Asteco said.
“For example, villa sales prices in Arabian Ranches, Meadows and Springs rose by 9 per cent on average over the quarter. Apartment sales also fared better with quarterly increases of 5 per cent in Jumeirah Village and Dubai Sports City.”
The UAE's property market, which softened in the wake of a three-year oil price slump that began in 2014 and on oversupply concerns, is showing signs of a revival as home-bound users look to upgrade to larger spaces amid a remote working and learning trend due to the pandemic.
Economic support measures and government initiatives, including visas for expatriate retirees, remote workers and the expansion of the 10-year golden visa scheme, have also helped to improve sentiment.
In April, the value of Dubai’s property sales transactions hit a four-year high of Dh10.97 billion, the highest monthly value since March 2017.
Prices have also held up due to lower supply. No large-scale villa developments were handed over during the first three months of 2021 in Dubai, while apartment supply stood at nearly 2,000 units, with notable deliveries in Dubai Hills Estate and Dubai Creek Harbour, Asteco said.
Average apartment rental rates grew by 1 per cent quarter-on-quarter, while villa rental rates increased 4 per cent during the period. However, rental rates were 10 per cent and 2 per cent lower for apartments and villas when compared to the same period last year.
In Abu Dhabi, average villa sales prices grew 1 per cent quarter-on-quarter but dropped 1 per cent year-on-year, according to the report. Apartment sales prices, on the other hand, remained unchanged during the quarter but slid 2 per cent on an annual basis.
Demand for completed villas for sale remained high in the first quarter, predominantly driven by the limited availability of quality properties at attractive prices. Affordable communities such as Al Reef also received heightened interest as sales prices rose 7 per cent.
Average villa rental rates remained more or less unchanged over the first quarter of 2021 but there was a significant increase in rents in West Yas, Golf Gardens and Saadiyat Beach Villas, the report said.
Nearly 1,700 apartments and 50 villas were delivered during the first quarter of 2021 in Abu Dhabi. The emirate still registered an increase in rental demand for villas, particularly within well-developed communities such as Yas Island, Al Raha Beach, Saadiyat Island and Al Reef.
Apartment sales prices in Sharjah increased by 3 per cent in the first quarter, while Ras Al Khaimah recorded no change.