Strong Demand Cushions Flood Impact On Dubai Housing Prices

(MENAFN- Khaleej Times) Robust demand cushioned the impact of flooding caused by April's record rainfall on Dubai home valuations in May, according to a review by ValuStrat Price index (VPI) on residential capital values.

Villa capital values continued to expand at similar monthly rates, while apartment valuations experienced accelerated growth compared to April, analysts at ValuStrat noted.

The VPI recorded 174.4 points in May, marking a 27.2 per cent annual increase, with a monthly rise of 2.1 per cent. Villas reached 221.2 points, while apartments stood at 144 points, compared to the baseline of 100 points set in January 2021.

According to JLL Mena, the UAE's residential sector recorded strong growth in Q1 2024. In Dubai, sale prices and rentals registered around 21 per cent annual increases, respectively. In Abu Dhabi, sales prices increased by an average of 7.0 per cent, while rental rates rose by an average of 4.0 per cent during the same period, JLL said in its Q1 review.

According to Knight Frank data, the average house price in Dubai stood at Dh3.3 million as of 2024. The cost of real estate in Dubai varies significantly based on the property type, size, location, and amenities. Older apartments in outlying areas sell from Dh400,000, mid-range villas in suburban communities average Dh2-3 million, and luxury penthouses or beachfront mansions can easily cost upwards of Dh 50 million.

The ValuStrat Price Index report noted that most established villa communities in Dubai exceeded their previous capital value peaks from 2024, and this month, Palm Jumeirah became the first apartment area to do the same. Monthly, apartment prices rose by 1.8 per cent, 0.2 per cent higher than April, marking a record annual growth of 22.4 per cent.

Among the areas with the highest apartment capital gains compared to the previous year are Discovery Gardens (34 per cent), The Greens (32.6 per cent), Palm Jumeirah (30.9 per cent), Al Quoz Fourth (29.1 per cent), and The Views (28.1 per cent).

Villa capital gains were at 2.4 per cent compared to April and 32.5 per cent since the previous year. Notably, top annual performers include villas in highly sought-after areas like Palm Jumeirah (41.7 per cent) and Jumeirah Islands (41.1 per cent), Dubai Hills Estate (37.5 per cent), Emirates Hills (32.5 per cent), and The Lakes (32.1 per cent).

Contract registrations for off-plan homes increased by 76.3 per cent YoY and 41.6 per cent monthly reaching a record monthly high of over 10,000 transactions representing 69.4 per cent of all residential sales. Meanwhile, the volume of ready home transactions grew 8.1 per cent since last year, 45.9 per cent since April.

In the prime home sector, there were 16 transactions for ready properties priced over Dh30 million, situated in Palm Jumeirah, Dubai Marina, Jumeirah Bay Island, Emirates Hills, and District One.

In May, Emaar (16.6 per cent), Azizi (8.5 per cent), Sobha (8.2 per cent), Damac (7.9 per cent), and Nakheel (3.6 per cent) led the developer sales charts overall.

Top off-plan locations transacted included projects in Jumeirah Village Circle (10 per cent), Ras Al Khor (9.5 per cent), Meydan One (9.4 per cent), and Dubai Hills Estate (7.7 per cent). Meanwhile, the majority of ready homes sold were in Jumeirah Village Circle (8.3 per cent), Business Bay (6.6 per cent), Dubai Marina (5.9 per cent), Downtown Dubai (5.3 per cent), and Jumeirah Lake Towers (3.9 per cent). Discovery Gardens and Dubai Hills Estate broke their individua records with the highest number of off-plan homes traded in one month


Khaleej Times

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