Dubai’s residential prices grow at the strongest pace since late 2014

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Dubai’s average prices grew at the strongest pace since late 2014, increasing by 16.9 per cent in the year through June 2023, as per a report by property advisory firm CBRE. This is up from the 15.9 per cent growth registered a month earlier.

This same period also saw average apartment prices grow by 17.2 per cent and average villa prices by 15.1 per cent.

As of June 2023, average apartment prices reached Dhs1,294 per square foot, and average villa prices reached Dhs1,525 per square foot.

Dubai real estate sales

The average apartment sales rates remain 13.1 per cent below the 2014 levels. However, average villa sales rates currently sit 5.5 per cent above their 2014 figures.

Downtown Dubai registered the highest sales rate per square foot in the apartment segment of the market, reaching Dhs2,440, while Palm Jumeirah registered the highest sales rate per square foot in the villa segment of the market, reaching Dhs4,845.

In June 2023, the volume of transactions in Dubai’s residential market totalled 9,876, marking an 18.8 per cent increase from the year prior. Over the same period, off-plan transactions grew by 44.9 per cent, whereas secondary market transactions marginally declined by 0.5 per cent.

In the year to date to June 2023, a total of 57,737 residential transactions were recorded. This is the highest figure registered over the year’s first two quarters.

Dubai’s rental market

In the rental market, average rents increased by 22.8 per cent in the year to June 2023, down from the 24.2 per cent increase recorded a month earlier. Over the same period, average apartment and villa asking rents grew by 22.7 per cent and 23.1 per cent, respectively.

In June 2023, the average annual apartment and villa rents stood at Dhs104,685 and Dhs314,552, respectively.

The highest average annual apartment and villa asking rents were respectively seen in Palm Jumeirah, with average apartment rents reaching Dhs258,335, and in Al Barari, with average villa rents reaching Dhs1,042,931.

Taimur Khan, head of research, MENA at CBRE, said, “A strengthening rate of price growth has been witnessed in Dubai’s residential market over the past few months, where in the year through June 2023, average prices across the city grew by 16.9 per cent, with average apartment and villa prices rising by 17.2 per cent and 15.1 per cent, respectively. This stronger rate of growth has been supported by the elevated activity levels, where mid-way through the year, the total transaction volumes hit the highest level on record over this period with 57,737 transactions. Looking at average apartment and villa prices, we have seen price growth in 97.1 per cent (apartment) and 96.8 per cent (villa) of the communities that CBRE monitors compared to a year ago. Prime and key residential areas are capturing an elevated level of demand and seeing significant price growth.”

“Conversely, we continue to experience softening in the rental market – a trend we expect to be maintained over the upcoming period, particularly since rental growth rates in several major areas are moderating, and many listings within these communities are reducing their asking rents.”