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Tuesday, February 27, 2024

Dubai real estate values keep rising

According to a report released on Tuesday, Dubai’s apartment prices continued their upward trajectory in August, driven by sustained demand, resulting in increased property valuations. The ValuStrat Price Index (VPI) for August 2023 displayed notable growth, with a 1.9 percent monthly increase and a significant 13.8 percent annual increase, reaching a total of 94.6 points.

Within this index, apartments scored 78.5 points, while villas reached 120.4 points, both compared to the benchmark of 100 points set in January 2014. ValuStrat noted a surge in apartment sales within affordable and mid-market communities.

The VPI serves as a valuation-based price index that captures periodic changes in capital and rental values for typical residential and commercial properties.

Dubai’s apartment submarket witnessed substantial monthly capital gains of 1.5 percent and a remarkable annual growth rate of 10 percent, marking the highest capital appreciation for apartments in a decade. Leading the pack in annual apartment performance were Palm Jumeirah (19.3 percent), The Greens (14.7 percent), Discovery Gardens (14.1 percent), Motor City (13 percent), and Jumeirah Beach Residence (11.3 percent).

In contrast, villa prices experienced a 2.4 percent increase compared to July and an impressive 18.2 percent increase since the previous year, although this was notably lower than the 33.9 percent annual villa capital gains observed in February 2022. Standout performers in the villa segment included Jumeirah Islands (24.2 percent), Palm Jumeirah (22.1 percent), Dubai Hills Estate (22 percent), and Emirates Hills (20.6 percent). Additionally, Jumeirah Park, Arabian Ranches, and Jumeirah Islands surpassed their 2014 price peaks by up to 3.2 percent.

Home sales grew by 1.1 percent monthly and 5.8 percent annually. Off-plan Oqood (contract) registrations experienced substantial monthly and annual increases of 13 percent and 40.8 percent, respectively, reaching a three-year record share of 63.5 percent of overall monthly sales. Meanwhile, transactions for ready homes declined by 14.6 percent monthly and 26.2 percent annually. Apartment sales dominated the market, representing 95 percent of all transactions, 99 percent of off-plan registrations, and 88 percent of ready home title deeds.

The average size of a ready home sold in the past eight months measured 1,624 square feet, with an average price of Dh1,341 per square foot. Emaar (10.9 percent), Damac (10.5 percent), Shoba (8.7 percent), Danube (5.6 percent), Nakheel (5 percent), ORO24 (4.3 percent), and Azizi (3.4 percent) were the top developers contributing to sales.

In terms of off-plan properties, Business Bay (15.1 percent), Jumeirah Village (15 percent), Arjan (10.4 percent), Shoba Hartland (9 percent), and Dubai Harbour (6.5 percent) were the most transacted locations in August.

Among ready homes, Jumeirah Village (9.2 percent), Dubai Marina (8.3 percent), Business Bay (6.5 percent), International City (4.9 percent), and Downtown Dubai (4.8 percent) were the top-selling areas. This reflects a continuing trend toward mid-market and affordable locations, with International City ranking fourth in terms of the highest number of ready home sales in August. Arjan secured the third spot in terms of off-plan registrations. Notably, Business Bay set a new record for the highest number of off-plan property transactions in a single month.

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