Real Estate

Dubai residential property prices surpass 2014 peak

July 12, 2023, 11:42 AM

A mansion on Palm Jumeirah sold for $82 million in July, making it the most expensive home ever sold in Dubai

Weighted average villa prices have reached a record $2.04m
88 $10m-plus homes were sold in Dubai in Q1
A record 57,737 residential deals were completed in H1 this year

Dubai’s residential property prices climbed at their fastest rate in almost a decade in the year to June 30, with villa prices topping previous records set in 2014.

Property consultancy CBRE reported that average residential prices in June increased by 16.9 percent, up from the 15.9 percent growth registered a month earlier.

Meanwhile, international consulting group ValuStrat’s June price index showed that Dubai villa prices increased 1.7 percent last month when compared with May.

They have increased 15.8 percent since last year, to reach a weighted average of AED7.5 million ($2.04 million) per villa.

In the first six months of the year, Dubai recorded a total of 57,737 residential property deals, the highest level on record, according to CBRE.

Average villa sales rates currently sit 5.5 percent above their comparative 2014 figures.

Palm Jumeirah registered the highest sales rate per square foot in the villa segment at AED4,845 ($1,319) while Downtown Dubai registered the highest per square foot in the apartment segment of the market, reaching AED2,440.

“This stronger rate of growth has been supported by the elevated activity levels,” said Taimur Khan, head of Mena research at CBRE.

“Prime and key residential areas are capturing an elevated level of demand and seeing significant price growth.”

Based on average apartment and villa prices, CBRE has seen price growth in 97.1 percent of the apartments and 96.8 percent of the villas in the communities that it monitors compared to a year ago.

Dubai’s property market has been boosted by higher oil prices, the government’s 10-year golden visa programme as well as an influx of high-net worth individuals (HNWIs) – people with wealth of more than $1 million.

The UAE had the highest net inflow of millionaires in the world in 2022 with 5,200 more HNWIs relocating to the emirates than leaving, according to the Henley Private Wealth Migration Report.

The study forecasts a net inflow of 4,500 HNWIs to the UAE in 2023.

Dubai last year ranked as the world’s top market for $10 million homes as sales hit $3.1 billion in the first half of 2022. This meant it edged past Hong Kong and New York, according to global property consultancy Knight Frank.

The emirate recorded 88 sales of units valued over $10 million in the first quarter of this year. The July sale of a mansion on Palm Jumeirah for AED302.5 million ($82 million) also set a new record for the most expensive home ever to be sold in Dubai.

Global HNWIs are looking to Dubai to invest in property, but with only 289 units due to be completed in prime residential areas by 2026, supply in the emirate’s real estate market is low, driving prices up, Knight Frank has noted.

The property price rise comes as the emirate reported some healthy economic indicators.

The UAE’s GDP per capita stood at $87,729 in 2022, according to the World Bank. Dubai’s economy is estimated to have grown five percent last year and is forecast to increase by 3.5 percent in 2023, according to Emirates NBD.

In June, the emirate’s non-oil private sector recorded the fastest increase in new business in ten months, according to the seasonally adjusted S&P Global UAE Purchasing Managers’ Index (PMI).

Total non-oil private sector business activity in Dubai rose for the 31st successive month while employment at such firms rose for the fourteenth successive month – the longest run of continuous job creation in over six years.