Property prices in Dubai rose for the tenth month in a row in August and are likely to continue their upward trajectory over the next two years, according to consultancy Property Finder.
Villa and apartment sale prices in Dubai have been going up since they hit their lowest levels in November 2020, reaching 956 dirhams ($260) per square foot last month, an increase of 1.6 percent compared to the previous month and 18.5 percent compared to a year ago.
Current prices are now 16.2 percent higher compared to 10 months ago, mirroring the growth seen in the previous upturn in the market that began in 2012. Between October 2012 and July 2013, prices rose by 17.2 percent.
“The previous market recovery lasted over two years from October 2012… If the current recovery takes a similar trajectory, it would allow for an additional 20 percent increase from current price levels, going into 2022,” Property Monitor said in its report.
Uptick in demand
Since COVID-19 restrictions eased last year, the Dubai property market has been seeing an influx of buyers looking to take advantage of low prices. Sale prices started to inch up late last year, but most of the gains are for high-end or premium properties in sought-after locations.
Villas and townhouses have been popular among buyers who are willing to pay a fortune on units with large outdoor space. However, once the supply of quality units gets absorbed, buyer interest is likely to shift to apartments, which should then start to see some price growth, according to Property Monitor.
“An additional push for apartments can come from increased sales by developers of their completed and off-plan inventory to visitors of the Expo 2020. This would be an opportunity for visitors and investors to experience Dubai’s real estate offerings at multiple price points rather than committing to higher-priced villas and townhouses,” the report said.
Property prices may have been going up since November, but current rates are still far from the market peak in September 2014, when prices hit a high of 1,234 dirhams per square foot.
How prices have changed: The Property Monitor Dynamic Price Index (DPI)>
Year-to-date transaction volumes now stand at 37,735, higher than the deals recorded throughout all of 2020.
“With four months remaining, we are on track to equal, or even surpass, transaction volumes last seen in the boom years of 2013 and 2014,” Property Monitor said.
High-end properties continued to lead the market, with deals involving properties valued more than 10 million dirhams accounting for 141 deals, up by 20.5 percent from 117 in July.
Off-plan properties registered 2,580 deals, up 41.8 percent on a monthly basis. On a yearly basis, transactions jumped over 230 percent, as developers held back on new property launches.
“The segment has started to gain momentum once again… Off-plan transactions took a 44.5 percent market share compared to 55.5 percent for completed properties, narrowing the gap by the most in six months.”
(Reporting by Cleofe Maceda; editing by Seban Scaria)
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