Property prices in Dubai rose 2.5 per cent in April recording the largest single-month increase since March 2014 as the economy recovers from the coronavirus pandemic-driven slowdown, according to a new report.
The average property price in the emirate climbed to Dh895 ($244) per square foot last month from Dh873 per square foot recorded in March, the Property Monitor monthly market report said.
“Since the end of 2020, prices have steadily recovered to record gains of 9.5 per cent in the last six months,” the report said. “However, this strong performance is not uniform across all communities, with some areas still displaying price weakness.”
The strong double-digit increase recorded in some communities is likely to slow in momentum “as the recovery switches to a more sustainable pace across Dubai as a whole”, according to the report.
Property prices in the UAE are expected to stabilise in 2021 as the economy bounces back from pandemic headwinds, driven by government initiatives to spur growth.
New programmes such as visas for expatriate retirees and the expansion of the 10-year golden visa scheme to attract foreign professionals to the UAE are also expected to support the local real estate market.
Dubai’s total transaction volumes in April stood at 4,879 deals, recording a year-on-year increase of 167.4 per cent and a 6 per cent jump on a monthly basis.
“Continuing the recent trend, there was a good volume of transactions in the high value segment of properties worth over Dh10 million. In all, 90 transactions were recorded for this segment, representing a month-on-month growth of 6.7 per cent,” the report said.
Some 81 villa transactions above Dh10m have been recorded on Palm Jumeirah so far this year, compared to 54 across the whole of 2020.
Dubai also recorded 1,926 off-plan transactions in April, up 13.9 per cent on a monthly basis and 46.5 per cent year-on-year.
“Betterhomes recorded the highest number of sales transactions on record for the month of April, despite it coinciding with the beginning of Ramadan,” Richard Waind, group managing director of brokerage Betterhomes, said.
“The extreme low interest rate environment and mortgage availability continues to drive healthy domestic end-user activity, and investors are returning with confidence, buoyed by recent capital gains.”
Wealthy Europeans clients are also buying the property in the UAE, he said.
“The lifestyle, safety and business-friendly environment are key pull factors and we think the post-Covid tax bill in many countries will act as a key push factor.”