According to the latest research by leading international real estate services firm, Chestertons, Dubai’s pandemic response, overall quality of life and recent visa reforms supported near-record transactions over Q3.
The findings, revealed in the latest Observer: UAE Q3 2021 Market Report, showed that total residential transaction value in Dubai increased by 10% Quarter-on-Quarter (Q-o-Q) to AED 34.11 billion, up from AED 31.02 billion in Q2, and surpassing the AED 31.67 billion achieved in Q4 2013. Completed property sales accounted for AED 20.63 billion of total value, while off-plan sales increased in value Q-o-Q by 48%, to AED 13.48 billion, as developers stepped up marketing activity ahead of Expo 2020.
Chris Hobden, Head of Strategic Consultancy, Chestertons MENA, said: “The success of Dubai’s initial COVID-19 response, bolstered by the pace of the UAE’s vaccine rollout, has positioned Dubai as the only major global city to remain largely restriction-free over 2021. The resulting stability, complemented by recent visa reforms, comparatively attractive pricing and the emirate’s overall quality of life, has continued to draw new residents.
“We have seen notable sales growth in the luxury segment, which we define as properties priced at AED 30 million and above, reflecting Dubai’s clear appeal to high-net-worth buyers internationally.”
Luxury residential sales value totalled AED 2 billion over Q3, bringing total luxury sales value to AED 4.6 billion over the year’s first three quarters. This compares to AED 919 million and AED 1.13 billion during the same period in 2020 and 2019, respectively.
Strong demand continued in Q3 for Dubai’s villa sales sector. An influx of new residents and sustained demand from settled expatriates increased market-wide villa prices by 6.4% Q-o-Q, supporting a 17.1% rise above their Q3 2020 average.
Palm Jumeirah, Arabian Ranches and Jumeirah Park saw the highest quarterly uplifts, with prices rising by 8.8%, 8.2% and 7.7%, respectively. Average prices in Palm Jumeirah reached AED 2,225 per sq ft, with Arabian Ranches seeing average prices rise to AED 920 per sqft and prices in Jumeirah Park reaching AED 840 per sqft.
Average values across The Lakes, The Meadows/The Springs and Al Furjan rose by 6.6%, 6.2% and 5.7%, respectively, Q-o-Q. Damac Hills and Emirates Hills recorded more moderate quarterly gains, of 4.2% and 3.7%, respectively, with prices in Damac Hills averaging AED 1,000 per sq ft and Emirates Hills topping AED 1,820 per sq ft.
On an annual basis, all locations witnessed a double-digit rise in prices, with Palm Jumeirah values standing 19.6% above their Q3 2020 average, denoting the most significant annual increase.
Meanwhile, apartment prices in Dubai witnessed a clear uplift, with average values rising by 2% Q-o-Q, with established residential areas typically recording more substantial gains. Downtown Dubai and Business Bay saw the highest quarterly rises, of 5.1% and 5.0%, respectively, with prices for the former averaging AED 1,450 per sqft, and the latter reaching AED 1,050 per sqft.
The Views, Dubai Marina, Jumeirah Lake Towers (JLT), Jumeirah Village Circle (JVC), The Greens and Dubai Silicon Oasis recorded uplifts, with average prices rising by 4.6%, 4.3%, 3.3%, 2.6%, 2.3% and 2%, respectively Q-o-Q.
Dubai Motor City (1%) and Dubai Sports City (0.9%) were more subdued, seeing marginal uplifts, while average prices in International City remained stable, at AED 415 per sqft. Only Discovery Gardens and Dubai Land witnessed price declines, by 1.0% and 4.2%, respectively.
In Dubai’s villa rental market, average rents rose by 5.2% Q-o-Q, with annual rates increasing 12.6%.
“While the increase in villa rents partly reflects a sustained tenant preference for larger space, a trend noticed since the easing of lockdown restrictions, the significant uplift recorded across prime villa stock has been spurred by demand from recent high-net-worth arrivals,” said Hobden.
“We expect the influx of recent wealth to the emirate, along with the ongoing tenant preference for villas, to continue to support rents over the final quarter,” he added.
Palm Jumeirah saw the highest increase in villa rents Q-o-Q, up 9.1%, and annually, at 29.3%. The Springs, The Meadows and Arabian Ranches also notched notable quarterly gains, up 7.1%, 7% and 5.9%, respectively. All other locations monitored saw quarterly uplifts of between 3.3% and 4.4%.
Meanwhile, average apartment rents in Dubai recorded modest growth over Q3, rising 0.6%. Dubai Marina, The Views and Downtown Dubai saw the highest increases of 4.7%, 4.3% and 4.2%, respectively, Q-o-Q. Business Bay saw a more modest increase of 1.4%, followed by JVC at 1.3% and DIFC at 1.2%, Q-o-Q.
JLT and The Greens saw modest quarterly upticks of 0.4% and 0.1%, respectively. Conversely, Dubai Land and Dubai Sports City saw the highest quarterly declines of 2.6% and 2.5%, respectively. All other locations monitored recorded moderate declines within a bracket of -0.4% to -1.3%.
“While a minority of secondary locations may face modest downward pressure over the final quarter, we expect continued improvements in the wider economy, along with a recovery in Dubai’s expatriate population, to support overall demand medium-term,” concluded Hobden.