Dubai’s prime residential market records 43.8% rise in sales volume in second quarter

Total sales during the period touched Dh16.7bn, with The Palm Jumeirah, MBR City and Downtown Dubai topping the charts

The UAE property market, which softened due to a three-year oil price slump that began in 2014 and oversupply concerns, is showing signs of a recovery. Courtesy Luxhabitat

Dubai’s prime residential market recorded a 43.8 per cent surge in sales volume in the second quarter of 2021, compared with the previous quarter, as the emirate’s property market recovers from the coronavirus pandemic, according to a survey.

Total sales during the period included 4,681 apartments and 818 villas valued at Dh16.7 billion ($4.54bn), according to Luxhabitat Sotheby’s International Realty report, which cited Dubai Land Department data.

Meanwhile, property prices increased by 1.4 per cent on the back of strong buyer activity in the period.

“The post-Covid resilience of [the] UAE’s economy is attracting immense wealth from across the world and, especially, from Europe, England and Americas,” said Chris Whitehead, managing partner of Luxhabitat Sotheby’s International Realty, on Sunday.

“This exponential growth in high-net-worth end-user buyers is here to stay and it will increase the demand for luxury sector properties through 2021 to next year.”

The top three areas by sales volume were The Palm Jumeirah (Dh4.2bn), MBR City (Dh2.43bn) and Downtown Dubai (Dh2.41bn), the report said.

Dubai Marina recorded total sales of Dh1.58bn during the period while Emirates Living had Dh1.43bn worth of sales.

The UAE property market, which softened due to a three-year oil price slump that began in 2014 and oversupply concerns, is showing signs of a recovery as people upgrade to larger homes with outdoor amenities as remote working and learning increase.

Economic support measures and government initiatives – such as residency permits for retirees and remote workers and the expansion of the 10-year golden visa programme – have also helped to improve sentiment.

The prime villa market also remained stable with an average price of Dh8.04 million in the second quarter, about 1.65 per cent lower than the first quarter, the report said. However, the sales volume for prime villas increased by more than 48 per cent from the previous quarter to Dh5.9bn.

Apartment sales climbed 25 per cent to Dh8.2bn, according to the report. The average prime apartment now costs approximately Dh2.1m. Apartments in prime areas were sold at an average price of Dh1,439 a square foot.

The top 10 property sales by value in Dubai in the first and second quarters:

Area prices

· The Palm Jumeirah, XXII Carat (Club Villas) – Dh119.5m

· The Palm, The fronds, Frond N – Dh111.2m

· The Palm, XXII Carat (Club Villas) – Dh105m

· The Palm, XXII Carat (Club Villas) – Dh89.1m

· Jumeirah Bay Island, Bulgari Resort – Dh87.5m

· Palm Jumeirah, The fronds, Frond J – Dh81m

· Emirates Hills Villa, Sector R – Dh72.3m

· Palm Jumeirah, The fronds, Frond N – Dh70m

· Palm Jumeirah, The fronds, Frond F – Dh69.2m

· Emirates Hills Villa, Sector R – Dh68m

Office rents on the rise in Abu Dhabi

Meanwhile, office rents in Abu Dhabi’s best buildings have begun to stabilise and even rise in some cases, according to Knight Frank’s Abu Dhabi Office Market Review for Summer 2021.

“While rents have begun to recover in the UAE capital’s best buildings, vacancy rates have remained relatively stable … driven by landlords’ needs to boost their rental income in order to meet their financing obligations and so some are perhaps adjusting rents upwards without new demand to support any increases,” the report said.

There are growing requirements for new space in the capital, according to the report. Demand levels in the second quarter were about 15 per cent higher than last year, fuelled by the banking and finance sector, alongside the healthcare and education sectors, each of which accounted for about 20 per cent of new demand.

“The healthcare and education sectors' requirements are in part stemming from the government’s decision to manufacture Sinopharm Covid-19 vaccines at Kizad, which is boosting office space requirements from healthcare-linked businesses, some of whom are looking for a first base in Abu Dhabi,” said Faisal Durrani, head of Middle East research at Knight Frank.

China is working closely with the UAE to strengthen vaccine production and distribution. The new Hayat-Vax complex in Abu Dhabi’s Kizad free zone will produce 200 million doses of Sinopharm's vaccine a year, Ni Jian, China’s ambassador to the UAE, told The National earlier this year.