Dubai realty bets on sustainable recovery

Dubai property prices will sustain an upward trend next year after posting strong recovery in 2021 despite a challenging environment worldwide in the wake of the Covid-19 pandemic, experts say.

Industry specialists and executives said Dubai real estate market sustained a price appreciation since November last year due to strong demand from the end-users and investors across the globe.

Referring to latest report released by ValuStrat, they said the citywide residential value price index (VPI) improved 12.6 per cent year-on-year basis as it witnessed accelerated monthly growth from 0.7 per cent in January to 1.8 per cent in October.

“The recovery continued in both villas and apartments this year as prices in few villa areas soared as high as 30 per cent when compared to October last year. Most of the apartment submarket also continued to improve, albeit at a slower pace,” according to the ValuStrat report.

Last week, the Dubai Land Department (DLD) said the year-to-date total sales reached 48,651 valuing Dh177.44 billion, reflecting a 38.34 per cent year-on-year growth in terms of transactions and 63.4 per cent in terms of value during the first 10 months of 2021. The emirate recorded best October in past eight years as investors poured Dh13.12 billion in the property sector through 5,352 deals.

Strong double-digit growth seen

Haider Tuaima, head of Real Estate Research at ValuStrat, said residential market is expected to grow at 15 per cent this year.

“Villas will lead recovery in real estate market with strong 25 per cent increase in prices this year while apartments are likely to grow at five per cent. Some villa locations are expected to grow above 30 per cent due to strong demand from end-users and investors,” Tuaima told Khaleej Times.

In reply to a question, he said this positive momentum will continue in post Expo period next year as well.

“Yes, the momentum is expected to stay in positive territory but at a slower rate. This is because of pending supply due next year,” he said.

“The villa segment that saw an exceptional growth this year may have reached their saturation ceiling, therefore it would either stabilise or see marginal improvement by the end of 2022,” he added.

Capital values surge

The ValuStrat report indicated that all 13 villa locations and all 21 apartment areas monitored by the VPI have seen their capital values either stabilise or improve when compared to the previous month.

For villas, the highest annual capital gains continued in older gated communities such as Arabian Ranches (31 per cent), Jumeirah Islands (30.9 per cent), The Lakes (27.9 per cent) and The Meadows (26.7 per cent).

For VPI monitored apartments, top annual performers in terms of double-digit capital gains were found within established beachfront communities in Palm Jumeirah (14.6 per cent), and Jumeirah Beach Residence (12.1 per cent). However, some areas such as Jumeirah Village apartments (-6.3 per cent), Dubai Sports City (-2.8 per cent), and Dubai Production City (-2.6 per cent) saw negative annual performance.

— muzaffarrizvi@khaleejtimes.com