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Rents continue to surge as Dubai house prices moderate

Average apartment and villa rents stood at Dh 85,294 and Dh 255,437 per annum respectively in June 2022.

A sustained surge in rental, prices and transactions of residential properties underscores the buoyancy of Dubai’s real estate market during the first half of 2022 in the backdrop of sweeping visa and economic reforms as well as other initiatives to attract global investors and talents.

The total volume of transactions in Dubai’s residential market reached 7,941 in June 2022, up 33.3 per cent from a year earlier while the average prices increased by 10.1 per cent in the year to June 2022, according to Dubai Residential Market Snapshot – July 2022 released on Friday by CBRE.

Average rents in the 12 months to June 2022 have also increased by 21.7 per cent, with average apartment and villa rents increasing by 21.2 per cent and 24.7 per cent respectively. As at June 2022, average apartment and villa rents stood at Dh 85,294 and Dh 255,437 per annum respectively.

“Transaction activity in Dubai’s residential market continues to remain near historic highs, with total transactions in the year to date to June 2022 reaching 38,901 this is the highest total recorded since 2009, over this period,” says Taimur Khan, head of Research – Mena at CBRE in Dubai.

While the rate of price growth has tapered to 10.1 per cent in the year to June 2022, the rate of rental growth continues to accelerate, where rents increased by 21.6 per cent over the same period. Rents, on average, are increasing at the fastest rate since mid-2014, Khan said.

During the first-half, off-plan sales increased by 46.7 per cent and secondary market sales by 24.4 per cent. Total transaction volumes in the year to date to June 2022 reached 38,901 this is the highest total recorded since 2009, over this period, said the report.

During the first half, average apartment prices increased by 8.7 per cent and average villa prices by 19.3 per cent. As at June 2022, average apartment prices in Dubai stood at per cent 1,103 per square foot and average villa prices stood at Dh 1,324 per square foot. Compared to the highs witnessed in late 2014, these rates per square foot are 25.8 per cent and 8.3 per cent below the peak, for apartments and villas respectively.

In the apartments segment, Jumeirah recorded the highest average sales rate per square foot at Dh2,079. In the villas segment, Palm Jumeirah recorded the highest average sales rate per square foot at Dh3,365.

In the rental market, the highest average annual apartment and villa rents respectively were found in Palm Jumeirah, where asking rents on average were Dh 218,413, and in Al Barari, where asking rents on average were Dh889,225.

According to the Zoom Property insights, the supply forecast of residential units shows that MBR City, Dubailand, Downtown Dubai, Business Bay, Dubai Creek Harbour, Al Jadaf, and JVC are among the top areas that will receive the highest units during the rest of the year.

MBR City is expected to lead the delivery of residential units in Dubai this year as the developers have accelerated the pace of projects to ensure timely completion and handover of projects, which is a positive sign for the market.

During the first five months of this year, the Dubai residential market recorded Dh61.9 billion worth of villa and apartment transactions despite a record spike in worldwide inflation.

Global property consultant Knight Frank believes that the impact of global inflation on the UAE economy and Dubai’s residential market is likely to be limited for now due to effective government measures.

According to property market pundits, Dubai’s property market would continue its upward trajectory despite the threat of the upcoming global recession. They said while the global recession poses a serious challenge, there will be a limited impact on the market as it is backed by new developments, the influx of overseas investment, and strategic planning of the government. — issacjohn@khaleejtimes.com