Dubai: Most villa community prices more than double in four years

Eighty five per cent of all established freehold villa communities in Dubai have more than doubled in value compared to four years ago, a new report shows.

According to the latest data from ValuStrat, a real estate consultancy, prices have also surpassed the previous peaks of the last decade, with Palm Jumeirah villas nearly doubling in value since 2014.

Dubai’s real estate market continues to shatter records, with prices per square foot reaching an all-time high of Dh1,431 – a significant 18 per cent year-on-year increase, data from Betterhomes showed.

The ValuStrat Price Index (VPI) grew 2.2 per cent monthly to reach 186.1 points, representing a 28.8 per cent annual increase. Villas scored 237.7 points, while apartments stood at 152.5 points, both measured against the baseline of 100 points established in January 2021.

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The VPI, is a valuation-based price index constructed to represent periodic change in capital values and rental values experienced by typical residential and commercial properties.

According to the ValuStart report for August, Dubai’s residential capital gains maintain strong momentum, exceeding market predictions. August saw over 15,000 sales transactions valued at Dh38.55 billion, marking a robust demand despite limited supply, Betterhomes data showed.

While the average size of homes purchased fell to record lows, off-plan registrations led the market, whilst ready property sales saw further declines.

Villa monthly capital gains were at 2.4 per cent and 33.5 per cent since last year. Notably, top annual performers include villas in highly sought-after areas like Palm Jumeirah (42.9 per cent) and Jumeirah Islands (42.4 per cent), Dubai Hills Estate (36.9 per cent), and Emirates Hills (34.3 per cent).

Month on month, apartment prices rose by 2 per cent, maintaining record annual growth of 24.4 per cent. Among the areas with the highest apartment capital gains compared to last year are Discovery Gardens (34.2 per cent), The Greens (33.6 per cent), Palm Jumeirah (30.3 per cent), and The Views (30 per cent).

Off-plan vs ready homes

Oqood (contract) registrations for off-plan homes grew 3.4 per cent monthly and 46.4 per cent annually, representing almost three-quarters of all home sales this month. However, the volume of ready secondary-home transactions fell by 15.8 per cent monthly but was 10.2 per cent higher than the period last year.

The off-plan segment continues to dominate, accounting for 68 per cent of all transactions with 10,285 deals worth Dh22.9 billion, the highest ever in terms of value, Betterhomes data showed. “Developers are seeing overwhelming demand, with buyers eagerly awaiting new supply in the market,” a Betterhomes spokesperson said.

The buyer profile in August showed a continued dominance of mortgage buyers, who accounted for 58 per cent of all transactions, compared to 51 per cent in the previous month, Betterhomes data showed. Investors also made up the larger share of the market, comprising 60 per cent of all buyers. “This month’s figures reflect the ongoing strength of Dubai’s real estate market, with off-plan developments continuing to drive momentum, and sales across various locations showing strong performance,” the Betterhomes spokesperson said.

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