Dubai Property Prices Reach New Heights with a Decade-Record Quarterly Gain

26 Oct, 2023

Dubai Property Prices Reach New Heights with a Decade-Record Quarterly Gain

Dubai's residential market has achieved an extraordinary milestone, recording the most substantial quarterly price increase in a decade, thanks to heightened property demand within the emirate, as per a report by property consultancy ValuStrat.

During the third quarter, the ValuStrat Price Index (VPI) for Dubai's residential market surged by 6.1% on a quarterly basis. Villa prices saw an impressive rise of 7.6%, while apartment prices increased by 4.8% within the same period.

On an annual basis, the index demonstrated substantial growth of 15.1%, with villa and apartment prices climbing by 19.8% and 11%, respectively. In the villa segment, notable capital gains were recorded in areas such as The Palm Jumeirah, Jumeirah Islands, Dubai Hills Estate, and Mudon. Meanwhile, in the apartment category, Discovery Gardens, The Greens, The Palm, and Dubailand Residence Complex emerged as the top performers.

Even prime properties witnessed remarkable capital gains in the third quarter. Prime property valuations exhibited an annual increase of 16.5% and a quarterly rise of 6.6%, according to the report. The VPI for prime villas reached a new 10-year high, reflecting year-on-year capital gains of 20.2% and a quarterly growth of 8.5%.

Dubai's property market has made a robust recovery from the slowdown caused by the COVID-19 pandemic. Government initiatives, including residency permits for retired and remote workers, and the expansion of the 10-year golden visa program, have played a pivotal role in this resurgence. Additionally, the economic boost generated by Expo 2020 Dubai and the favorable impact of higher oil prices have further supported the momentum of the property market's growth.

Notably, Dubai's non-oil private sector economy has maintained robust business activity. Sales growth reached its highest point in more than four years in September, with the S&P Global purchasing managers' index reading surging to 56.1, marking the strongest performance in three months. Dubai's economy expanded by 3.2% annually in the first half of 2023, driven by the robust performance of the transport and storage sector.

In parallel, Dubai's residential rental values have experienced significant increases in the third quarter. Residential asking rents in the emirate escalated by 27.2% compared to the same period the previous year. Villa and apartment rents saw substantial annual rises of 38.7% and 19.1%, respectively.

The report also revealed that approximately 53,715 new build units were expected to enter the market in 2023, based on developer completion schedules. In the first nine months of the year, a total of 21,507 apartments and 2,068 villas were completed, equivalent to 44% of the preliminary estimates for the entire year.

Furthermore, office sales transactions saw a year-on-year growth of 9% during the third quarter, totaling 631 transactions. The median transacted price stood at Dh11,140 per square meter, marking a significant annual increase of 28.4%. Business Bay retained its position as the most preferred location for office sales, with a share of approximately 44.5%, followed by Jumeirah Lakes Towers at 33% of overall transactions.