Rise in Dubai Housing Prices on Back of Real Estate Optimism

Prices of villas in Dubai surged in August, recording double-digit growth in prime residential areas in the UAE emirate. Highest gains were recorded in Arabian Ranches, Jumeirah Islands, Dubai Hills Estate, and The Lakes, according to the latest ValuStrat Price Index (VPI). All 13 villa locations and 21 apartment areas monitored by the index have seen an increase in the capital values of properties compared to the previous month, the report said. Rising values could be attributed to a more positive demand as population in the emirate grows by 8 % annually, as well as to government efforts in increasing the quality of life of its residents, Calum White, a real estate expert, told Arab News.

Apartments’ prices saw mixed performance, with a third of all monitored properties recording negative annual growth, a third stable, and a third single-digit annual capital growth. Top annual performers in this area were in Palm Jumeirah, Jumeirah Beach Residence, Al-Furjan, and Al-Khail Heights. Sales transactions during the month was up 49 % in volume, as compared to July. Ready sales rose 57 %, while off-plan project registrations jumped 42 %. Property developer Emaar topped the sales chart, followed by Nakheel, Damac, and Dubai properties. The demand for housing could solve a huge supply glut in the market, which White said has led to the correction of real estate prices over the years.

“In most established real estate markets house builders steadily add inventory to the market as a response to the demand. In Dubai, there has been a slightly different approach — with the projected growth, developers have continued to release inventory into the market,“ White, who is the chief executive of Dubai-based real estate company White and Co., said. He said Dubai’s regulators have started implementing a “stricter criteria“ for the approval of new projects as a response to the oversupply. “The Dubai market is maturing at such a rapid rate, (with) new regulations in place which help buyer, seller, tenant, landlord and even broker alike,“ he said.