During the January-March 2024 period, property prices in Dubai experienced another consecutive quarterly increase, primarily bolstered by the demand in affordable and mid-market neighborhoods.
Analysts highlight that apartments in Discovery Gardens, Sports City, and Dubailand observed the most significant surge in prices, propelled by both local residents and foreign investors sustaining the demand.
Furthermore, villa owners are renovating older properties and reselling them at significantly higher prices to meet the escalating demand in the market.
According to Prathyusha Gurrapu, Director and Head of Research and Consultancy at Cushman & Wakefield Core, the momentum in Dubai's property market remains robust, as evidenced by the 15th consecutive quarterly increase in city-wide sales prices. Gurrapu highlights a remarkable 20% year-on-year surge, marking a substantial 66% rise since the first quarter of 2020, pre-COVID-19.
Moreover, Gurrapu notes a moderation in price escalation for apartments, particularly in prime sub-markets such as Palm Jumeirah, City Walk, Downtown Dubai, and Dubai Marina, where sales price hikes have tempered to below 20% year-on-year.
The upward trajectory in property values, which commenced post-COVID-19, persists into 2024. Dubai's real estate prices remain comparatively affordable globally, attracting significant investor interest.
With rents on the rise due to an influx of foreign workers, tenants are increasingly transitioning into property ownership, contributing to the evolving landscape of Dubai's real estate market.
Gurrapu highlighted the remarkable surge in affordable and mid-market apartment communities, with increases exceeding 30% in Discovery Gardens (37%), Dubai Sports City (34%), and Dubailand (32%), owing to their lower starting points.
Haider Tuaima, Director and Head of Real Estate Research at ValuStrat, emphasized a robust 24.7% year-on-year increase in capital value during the first quarter, primarily driven by mid-affordable communities. Tuaima identified Discovery Gardens, The Greens, Palm Jumeirah, The Views, Town Square, Al Quoz Fourth, and Dubai Production City as the top-performing areas.
ValuStrat data indicates an estimated 46,558 newly-built units slated to enter the market in 2024. As of the first quarter, approximately 5,770 apartments and 1,038 villas have been completed, constituting 15% of the preliminary estimates for the entire year.
Moreover, around 86,000 apartments are currently under construction, with promised handovers expected by 2028.
Renovating older villas to sell at higher rates
Data from Cushman & Wakefield Core indicates a significant year-on-year increase in sale prices for the majority of villa districts, surpassing 20%. Notably, villas in Jumeirah Village Circle, The Lakes, and Jumeirah Park recorded the highest surge.
Gurrapu attributed this rise in villa sales prices, particularly in older areas like The Lakes and Jumeirah Park, to the trend of renovating and reselling units at considerably higher rates. This trend contributes to an overall elevation in average prices within these districts. Gurrapu noted that these villa communities boast central locations, established schools, amenities, and spacious layouts, allowing them to command substantial premiums post-upgrades.
Haider Tuaima further emphasized the resilience of villas, citing a year-on-year increase of 29.6%, reaching a 10-year high in prime villa values.
ValuStrat data reveals approximately 21,230 villas under construction in Dubai, slated for delivery by 2024.
News Source: Khaleej Times
