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Dubai property trends: Q1 shows record sales over improved investor confidence

May 3, 2021
real estate

The first quarter saw the highest recorded number of home sales transactions since 2010, says ValuStrat

The Dubai real-estate market recorded a high number of home and office sales transactions in the first quarter of 2021, according to a report by ValuStrat.

“A positive trend which commenced [during the] 2nd half of 2019, cut short by the COVID-19 restrictions last year, appears to have now re-emerged with improved investor confidence boosting demand, with a record number of title deeds registered and price growth currently evident in some sectors and locations,” the report said.

The ValuStrat Price Index (VPI) for the residential market showed an average quarterly improvement of 0.8 percent, as the first three months of the year saw accelerated positive trends for the first time since 2014.

The valuation-based index tracks change in capital values for a representative fixed basket of properties.

All established freehold villa locations monitored by the VPI saw capital values improve since the last quarter, ranging from 1.8 percent to 5.4 percent, the report said. However, only half of apartment locations improved in value, some areas saw declines of up to 2.8 percent. On an annual basis, all locations witnessed price drops, some in single digits.

“Best performing freehold areas were International City, Arabian Ranches, The Meadows, The Lakes and Palm Jumeirah. Citywide, residential capital values were 10.9 percent lower than the same period last year.”

The Dubai VPI for residential rental values stood at 61.9 points, remained stable quarterly for the first time in two years. The average residential annual rent in Dubai was 76,910 dirhams, apartments at 55,000 dirhams and villas at 211,485 dirhams. Dubai’s residential net yields averaged 6.1 percent, with apartments at 6.4 percent and villas at 4.9 percent.

The ValuStrat Price Index for offices remained relatively stable on a quarterly basis, grew a marginal 0.1 percent QoQ at 59.5 points. On a location level, Dubai International Financial Centre, Jumeirah Lake Towers, and Downtown Dubai gained 6.8 percent, 2.3 percent, and 3.8 percent respectively.

The first quarter saw the highest recorded number of home sales transactions since 2010, the report said. There were sales of more than 6,000 ready homes worth 13.5 billion dirhams and 3,600 off-plan properties worth 5 billion dirhams.

On the supply side the quarter saw the completion of total 36,015 units of which 27,435 were apartments and 8,580 were villas/townhouses. For 2021, estimated upcoming supply currently stands at 46,316 apartments and 10,563 villas and townhouses.

Meanwhile residential rents fell 11 percent year-on-year. Listed rents were down 18.4 percent for apartments y-o-y but jumped 3.9 percent for villas, a record increase since the base year, according to ValuStrat.


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