Dubai’s residential market strong; October rents up 27%

PHOTO

Dubai’s residential market has been witnessing steady growth over the past two months with the housing rents increasing by 27.3% in October compared to a year earlier, extending on the record high annual growth it registered in the previous month, according to real estate industry expert CBRE.

The total volume of transactions in Dubai’s residential market registered 8,269 in October, highlighting an increase of 72.5% from the prior year, it stated.

This increase has been underpinned by a 133.5% increase in off-plan market sales while secondary market sales rose by 29.4%. In the year to date to October, the total transaction volumes reached 71,412, this continues to be the highest total recorded since 2009.

Average prices rose by 9.2%, in the year to October 2022, where average apartment prices rose by 8.5% and average villa prices by 13%, stated CBRE in its report.

In Dubai, average apartment prices reached AED1,149 per sq ft, and average villa prices AED1,359 per sq ft. In comparison with the highs recorded in 2014, these average rates are still 22.8% and 6%, below this peak, for apartments and villas, respectively.

In the apartment segment of the market, Jumeirah registered the highest average sales rate per sq ft at AED2,226, whilst in the villa segment of the market, Palm Jumeirah recorded the highest average sales rate per sq ft at AED3,704.

In the 12 months to October 2022, average rents increased by 27.3%, where average apartment rents rose by 27.5% and average villa rents by 25.7%. As of October 2022, the average annual apartment and villa asking rents reached AED91,795 and AED273,740, respectively, according to CBRE.

The highest average annual apartment and villa rents were respectively seen in Palm Jumeirah, where average rents reached AED 242,250 on average, and in Al Barari, where average rents registered AED 956,174, it stated.

Taimur Khan, Head of Research – Mena at CBRE in Dubai, said: "We expect the rate of change in the rental market to start tapering off by the end of 2022. In the sales market, 8,269 transactions were recorded in October, up 72.5% over last year."

"A total of 71,412 transactions were recorded in the year to date to October 2022, to put this into context, in 2019 this figure totalled 29,394. In terms of transaction volumes for the year, we expect 2022 total transactions to comfortably surpass the 2009 total," he added.