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Dubai’s residential sector records highest quarterly capital gains in a decade

Villa valuations surpassed peaks seen in 2014 by 2.6%

Published: Tue 24 Oct 2023, 5:06 PM

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Valuations of prime properties grew 16.5 per cent YoY and 6.6 per cent QoQ to reach 106.2 points. — KT file

Valuations of prime properties grew 16.5 per cent YoY and 6.6 per cent QoQ to reach 106.2 points. — KT file

Dubai’s residential sector recorded its highest quarterly capital gains in a decade in the third quarter of 2023, with the ValuStrat Price Index (VPI) growing a record 6.1 per cent quarter on quarter to reach 96.6 points, 15.1 per cent higher than last year.

Villa valuations surpassed peaks seen in 2014 by 2.6 per cent, with villa prices increasing by 19.8 per cent year on year and 7.6 per cent QoQ to reach 123.6 VPI points.


According to the property consultancy, the highest quarterly performers were Palm Jumeirah (9.5 per cent), Jumeirah Islands (9.5 per cent), Dubai Hills Estate (9.3 per cent), and Mudon (9.0 per cent). The apartment VPI saw decade-long record capital gains, up 4.8 per cent QoQ to reach 79.7 points, up 11 per cent YoY, 29.2 per cent below peaks of 2014.

The report said the highest quarterly performers were Discovery Gardens (7.5 per cent), The Greens (7.3 per cent), Palm Jumeirah (6.7 per cent), and Dubailand Residence Complex (6.6 per cent)

Valuations of prime properties grew 16.5 per cent YoY and 6.6 per cent QoQ to reach 106.2 points. The VPI for prime villas reached a new 10-year high of 135.7 points with capital gains of 20.2 per cent YoY and 8.5 per cent QoQ. While highly desired prime-located apartments lagged behind their villa counterparts, annual gains accelerated to 13.6 per cent and 5.2 per cent when compared the previous quarter, to reach 90.1 index points.

“Based on developer completion schedules, the number of new build units entering the market this year was estimated at 53,715 homes. Total project completions as of the first nine months of this year stood at 21,507 apartments and 2,068 villas, equivalent to 44 per cent of preliminary estimates for the whole of 2023,” said the report.

The third quarter saw 11,308 ready (secondary) home sales transactions, up 17.7 per cent YoY but down 5.0 per cent QoQ, equivalent to investments worth Dh26.4 billion. The average ticket size of ready-to-move-in properties declined 1.4 per cent YoY to Dh2.3 million. Some 41.5 per cent of all ready home sales, 99 per cent of which are apartments, were priced less than Dh1.0 million, that's compared with 38.4 per cent last year. There were 52 sales of homes worth over Dh30 million, that's compared 67 during the same period last year, the report noted.

According to property market pundits, Dubai's real estate market defies global trends and sets new records in property transactions, driven largely by the off-plan market. According to research conducted by one of the world's leading property agents, Savills, real estate transactions surged by an astounding 44 per cent in the first half of 2023, reaching nearly 60,000 units. This not only indicates an astounding 209 per cent increase compared to the five-year average for this period but also underscores Dubai's enduring appeal as a stable investment destination.

In 2023, Dubai’s residential sector is on track to be the busiest. A total of 57,700 units have been transacted across the city during the first half of 2023, a growth of 12 per cent compared to H2 2022 and 44 per cent versus H1 2022. “A key driver of this market growth is the resounding success of the off-plan market segment, which constituted nearly 53 per cent of all units sold in the first half of the year. Buyers are increasingly turning to off-plan properties as a means to navigate the current economic landscape and avoid committing to high lending rates. The surge in demand is reflected in the increase of new project launches and developments emerging all over the country,” realty experts said.



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