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House prices in Dubai rose at the fastest rate since the summer of 2014 in the second quarter of 2021 due to increased demand for large-scale residences with more outdoor space and home offices to cope with the remote working trend.
The latest research report by Knight Frank, a global real estate consulting firm, stated that the average transaction price in the second quarter rose by nearly 1% as the sales of homes priced over 20 million dirhams were at their highest level since 2015.
“The momentum that began at the end of last year has continued. We have seen a slow but steady rise in transaction value. The government’s extraordinary response to the pandemic has injected confidence into the economy, and this confidence has penetrated the entire economy-buyers are more concerned about life. Confidence, and increasingly committed to buying houses,” said Faisal Durrani, a partner, the head of the Middle East. Research at Knight Frank.
He said that the larger houses-villas-have rebounded the most, with prices now about 17% lower than the last market peak six years ago.
Knight Frank’s report stated that certain markets have rebounded faster than other regions, such as villas, so it’s no surprise that there has also been a surge in transaction activity in the sales of millions of dirhams, especially those of 20 million dirhams. Housing, maintain high demand.
According to a recent report by the ValuStrat Price Index, villas led the soaring of residential property values ​​in Dubai in the second quarter, an increase of 7.0% compared to the previous quarter and an annual growth rate of 6.3%.
All villas monitored by the Basket showed improvements not seen since 2014. The highest annual capital gains were recorded in Arabian Ranches at 10.3%, Jumeirah Islands at 9.1%, Dubai Hills at 9.0%, Lakes at 8.2%, Mudon at 7.7%, and The Meadows at 7.2%.
Although the average price is still 26.3% lower than the previous high, certain groups of buyers have already withstood the performance of market imbalances, and prices of certain ethnic groups have risen sharply.
“Considering the fluctuation of the UAE Dirham exchange rate since the summer of 2015, the situation of investor beneficiaries is very different,” Knight Frank reported.
Knight Frank’s research shows that 128 homes with more than 20 million dirhams have been sold between January and June 2021, which is the highest level since 2015, when 137 transactions within this price range were recorded. Last year, a total of 75 houses worth more than 20 million dirhams were sold.
A recent forecast by Knight Frank shows that Dubai’s construction industry will deliver approximately 62,000 residential units in the emirate this year and nearly 63,500 units by 2022, which will be the highest level since 2009.
“The pandemic has not inhibited super-quality sales activities, but has accelerated it. Families are looking for larger houses, with more outdoor space, and even home office space, because many people are looking for greater remoteness in the future. Work to hedge, which echoes what we see elsewhere in the world. More importantly, they are willing to spend more money on privileges,” Durani said.
Maria Morris, Partner and Head of Housing at Knight Frank Middle East, said that Dubai’s prime and ultra-premium residential market continues to maintain an impressive upward trend in the first half of 2021. Both local and global buyers continue to see the attractive use of Dubai. Invest in luxury real estate.
“This rise in the Dubai real estate market is certainly driven by multiple factors, such as the UAE’s impressive Covid-19 vaccination level and the significant government response to the global pandemic, which helps the UAE’s economic Restored after the blockade,” Morris said.
Morris said that other initiatives by the UAE government, such as the introduction of remote working visas, golden visas and 100% foreign company ownership, have also had an impact on increasing demand for real estate in the region.
issacjohn@khaleejtimes.com
Isaac John
The editorial director of Khaleej Times is a well-connected Indian journalist and economic and financial commentator. He has worked in mainstream journalism in the UAE for 35 years, including 23 years in Khaleej Times. He is a graduate of English major and a graduate of economics major, and has won more than 20 awards. He is widely praised for his real and insightful analysis of global and regional business and economic trends, and is respected for his keen understanding of local business scenarios.
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