Dubai house prices accelerate at fastest pace since 2014

House prices in Dubai during the second quarter of 2021 accelerated at the fastest pace since the summer of 2014, as demand increased for larger homes with more outdoor space and a home office to cope with the remote working trend.

The latest research report by global property consultancy Knight Frank said the average transacted prices rose by almost one per cent during Q2, as sales of homes priced above Dh20 million were at the highest level since 2015.

“The momentum that began building late last year has been sustained and we are seeing a slow, but steady upward creep in transacted values. The confidence that has been injected into the economy by the government’s phenomenal response to the pandemic has percolated across the economy – buyers feel more confident about life and are committing to home purchases in increasing numbers,” said Faisal Durrani, partner – head of Middle East Research at Knight Frank.

He said it is the larger homes – villas – that are seeing the sharpest rebound, with prices now about 17 per cent below the last market peak six years ago.

The Knight Frank report said certain pockets of the market are rebounding faster than others, such as villas, so it is no surprise that multi-million-dirham home sales are also registering a spike in deal activity, with Dh20 million homes, in particular, remaining in high demand.

According to a recent report by ValuStrat Price Index, villas spearheaded a surge in Dubai’s residential property value in the second quarter with a rise of 7.0 per cent when compared to the previous quarter and an annual gain of 6.3 per cent.

All villas monitored by the basket saw improvements not seen since 2014. The highest annual capital gains were recorded in Arabian Ranches at 10.3 per cent, Jumeirah Islands with 9.1 per cent, Dubai Hills Estate at 9.0 per cent, The Lakes with 8.2 per cent, Mudon at 7.7 per cent and, The Meadows with 7.2 per cent.

While average prices remain 26.3 per cent down on their previous highs, certain buyer groups have weathered the market’s lopsided performance, with certain nationalities enjoying significant price appreciation.

“Factoring for currency wobbles against the UAE dirham since the summer of 2015 reveals a very different picture of when it comes to investor beneficiaries,” Knight Frank report said.

issacjohn@khaleejtimes.com