A record 36,946 residential transactions were recorded in the first four months of the year, CBRE says
In April, the off-plan market continued to drive up sales of residential units, resulting in an average annual increase of 14.5% in property prices in Dubai.
According to the latest Dubai Residential Market Snapshot report by property consultancy CBRE, the average price per square foot for apartments rose by 14.5% to Dh1,256 ($342), while average villa prices increased by 14.9% to Dh1,484 per square foot in the year leading up to April.
Sales rates also rose on a monthly basis, with apartment rates up by 1.8% and villa rates growing by 2%. Although average apartment sales rates in the emirate remain 15.6% below record levels posted in late 2014, some neighborhoods have surpassed 2014 levels. Meanwhile, average villa sales rates are now 2.7% above their 2014 peak.
CBRE highlighted that Jumeirah remains the most expensive area to purchase an apartment, with the price per square foot at Dh2,367, which is down by 3.1% from March. Palm Jumeirah recorded the highest sales rate per square foot for villas at Dh4,635, up 4% on a monthly basis. CBRE noted that Downtown Dubai, Palm Jumeirah, Dubai Hills Estate, and The Old Town made up the five most expensive areas for apartments, while Jumeirah, Emirates Hills, District One, and Jumeirah Islands were the most expensive for villas.
Total property transactions in April were 7,615, representing a 16.2% increase from the same period the previous year. CBRE reported that this brought the total for 2023 to 36,946, a 43.2% rise compared to the same month in 2022, marking a record for the first four months of any year so far. While the off-plan market posted a 42.5% growth in sales, weakness in the secondary market resulted in a 2.4% decline in sales.
“Activity levels in Dubai’s residential market remain steadfast,” Taimur Khan, head of research for Mena at CBRE, said.
“On a monthly basis, a deceleration in activity levels has been witnessed following the record figure registered in March 2023. Despite this — and on the back of this elevated demand — average residential prices in Dubai continue to register significant increases.”
Dubai's property market experienced a robust recovery from the effects of the coronavirus pandemic last year, due to the emirate's economy bouncing back on the back of higher oil prices and government policies, including changes to visa regulations that attracted more investment. In 2020, the market witnessed an impressive performance, with property transactions reaching a record high of Dh528 billion, which is a 76.5% YoY increase, while the number of transactions rose by 44.7% YoY to 122,658.
Crown Prince Sheikh Hamdan bin Mohammed noted that the market's performance will aid Dubai in fulfilling its ambition of being among the world's top three cities, and achieving its economic agenda's D33 objective of doubling the emirate's economy by 2033.
The real estate sector is a cornerstone of Dubai's sustainable development plan and a vital driver of its 2040 Urban Master Plan. Sheikh Hamdan added that Dubai remains an attractive investment destination due to its stable economy, sound financial fundamentals, and potential for growth.
In the rental market, average rents surged in the year 2023 up until April, with apartment and villa rents rising by 25.7% and 26.1%, respectively. The average annual apartment and villa rents in April were Dh102,675 and Dh308,616, respectively, while the highest average annual apartment rents were in Palm Jumeirah at Dh263,762. The villa segment's highest average rents were found in Al Barari, nearly hitting Dh1.008 million, according to CBRE.
The rental hikes are attributed to an influx of high-net-worth individuals into the city and the introduction of new visa programs that encourage residents to stay longer or move from abroad.
“Looking at the rental market, we have started to see a slight moderation, where the growth rate has tapered off for the third consecutive month,” Mr Khan said.
SOURCE: The National News