Dubai: Villa prices post double-digit growth in August 2021

Dubai - Apartments in some areas of Dubai saw single-digit improvement as investors return to market.

Dubai's real estate sector continued its strong upward trend in terms of price valuation as both villa and apartment rates showed marked improvements in August as property investors returned to the market.

For only the second time in six years, all 13 villa locations and 21 apartment areas monitored by the real estate consultancy ValuStrat's value price index (VPI) have seen their capital values either stabilised or improved last month when compared to July.

Areas in demand

For villas, the highest annual capital gains were found in Arabian Ranches (22 per cent), Jumeirah Islands (20.8 per cent), Dubai Hills Estate (18.5 per cent) and The Lakes (18.3 per cent).

Annual capital value performance of Dubai’s apartments, which represent 87 per cent of the residential market, were a mixed bag as compared to villas. A third of all apartments witnessed negative annual growth, a third stable, and a third had single-digit annual capital growth.

Sales transaction volumes were up 49 per cent last month compared to July. Month-on-month performance saw ready sales rise 57 per cent and off-plan Oqood (contract) registrations expand 42 per cent, the report said.

Strong recovery

Declan King Mrics, managing director and group head for Real Estate at ValuStrat, said the Dubai property sector has stages a strong recovery this year.

“Excluding any unexpected economic or global shock we expect the current positive trends in the Dubai property market to continue in the short to medium term and to broaden out into some areas currently not seeing an uplift in values. This is predicated upon a sustained move into a post-Covid environment and continued recovery in the business sector, return of strong inbound international tourist flows (Expo) and continued low interest mortgage rates,” Mrics said.

He said the buyer perception that purchase prices still represent good value, and a mid-term undersupply in some in-demand districts and segments such as villas and prime apartments remains as developers work to prepare a pipeline of launches for new builds.

“Demand from tenants moving into home ownership, given mortgage payments often being less than some now rising villa rents, and opportunistic investor buying in the hope of future gains is expected to remain. However, it can be expected that some of the highest year-on-year percentage gains recently seen will moderate, as buyer price ceilings are neared and more moderate house price inflation is seen,” he said.

— muzaffarrizvi@khaleejtimes.com