Villas continue to drive Dubai’s property market in 2022: Experts

Inayat-ur-Rahman, Business Editor

The ValuStrat Price Index, which measures Dubai’s residential capital value performance, has revealed that the property prices surged 18.8 per cent annually and 1.2 per cent monthly. Villas spearheaded this trend as prices jumped 34.1 per cent annually but saw a stable growth rate of 2.1 per cent.

Apartments witnessed single digit growth of 8.4 per cent annually with marginal monthly growth of 0.4 per cent.

The overall residential VPI reached 79 index points in March 2022. While this is 21 per cent lower than the 100-point index base of January 2014, Dubai typical apartment’s VPI reached 69.5 points, however, typical villas almost touched the index base at 94.1 points.

Villa’s capital values grew at a constant monthly rate of 2.1 per cent, some areas saw prices marginally increase such as Mudon (0.5%) and Green Community West (0.8%). On an annual basis, average villa prices jumped 34.1%. The top performers were Jumeirah Islands (40.3%), Arabian Ranches (40.3%), The Lakes (37.1%), and Jumeirah Village (35.5%). March 2022 saw villas located in Palm Jumeirah cross their peaks of 2014 by 5.3% with 126.6 index points.

All apartment locations monitored by the valuation-based index had positive annual capital gains averaging 8.4 per cent. Best annual apartment performance with double-digit growth was recorded in highly demanded Palm Jumeirah (21.9 per cent), as well as established locations such as Jumeirah Beach Residence (16 per cent), the Burj Khalifa tower (15.3 per cent), The Views (10.9 per cent), and The Greens (9.7 per cent).

Dubai’s volume of home sales increased 26.1 per cent when compared to the previous month and 146.6 per cent higher than the same period last year. The month-on-month performance saw cash and mortgage sales of ready properties as well as off-plan Oqood (contract) registrations grow 26 per cent, the latter representing 43 per cent of overall transactions. March saw 15 transactions valued over Dhs 30 million, one such transaction of a 6-bedroom villa located in Emirates Hills sold for Dhs 75 million.

Ata Shobeiry, CEO of Zoom Property told Gulf Today that villas will continue to show their dominance with a 2.1% monthly growth in March, while the apartment sector recorded a marginal growth of 0.4 per cent in prices. “With new projects in the pipeline, the gap between the price growth of villas and apartments is likely to shrink gradually,” Shobeiry said.

Taimur Khan, Head of Research – Mena at CBRE in Dubai, comments: “Despite the continued increase in the cost of financing and further tightening of payment plans, we have yet to see this impact transactional activity in Dubai’s residential market. In fact, the total number of transactions in March reached 7,865, up from 5,598 a month earlier. As a result, this has been the strongest first quarter on record for Dubai in terms of residential transactions. While average prices and average rents continue to increase, we are seeing a moderation in both sales and rental growth rates in the villa segment of the market.”

Topping the sales charts overall were properties developed by Emaar (24.3 per cent), Damac (17.7 per cent), Nakheel (6.9 per cent), Select Group (4.1%), and Dubai Properties (3.2%). Top off-plan locations transacted this month included projects located in Business Bay (15.7%), Dubai Creek Harbour (9.2%), and Downtown Dubai (8.8%). Most transacted ready homes were in Damac Lagoons (16%), Jumeirah Village (5.8%), Dubai Marina (5.6%) and Business Bay (5.3%). Apartments in Dubai Hills Estate and villas in Jumeirah Islands broke their individual records with the greatest number of homes sold in one month since 2010.

ValuStrat offers premium subscription reports for clients granting them access to in-depth, statistical analysis of what is happening in residential real estate; allowing for more informed decision making and forward planning. The full in-depth 100+ page Dubai report includes citywide analysis of freehold districts, including the ValuStrat Price Index, transaction volumes, service charges, Price to Rent Ratios and Net Yields.

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The ValuStrat Price Index for Dubai’s residential capital values is a valuation-based index constructed to represent the monthly price change experienced by typical residential units within Dubai. The ValuStrat Price Index for Dubai’s residential rental values represents the quarterly rental change experienced by typical residential units within Dubai.