Dubai residential capital values jump on steady recovery

Villas in Arabian Ranches, Jumeirah Islands, The Lakes and The Meadows record highest gains, ValuStrat says

Exterior view of a villa at the Arabian Ranches on Emirates road in Dubai. Properties developed by Emaar topped the sales chart in Dubai in October. Pawan Singh / The National

Capital values for villas and apartments in Dubai either “stabilised or improved” in October as the UAE economy rebounds from the Covid-19 pandemic, according to real estate consultancy ValuStrat.

The ValuStrat Price Index (VPI) for Dubai, which monitored 13 villa communities and 21 apartment areas in the emirate, jumped 12.6 per cent on an annual basis in October. It grew 1.8 per cent last month, from a 0.7 per cent increase in January.

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

“Prices [are] heading for recovery as Cityscape opens doors to investors at the Expo 2020 site,” ValuStrat said in its report.

The property market in the UAE, the second-biggest Arab economy, has made a strong recovery from the pandemic-driven slowdown as the country’s economy improves on the back of fiscal and monetary measures. Pent-up demand and improved investor sentiment have also helped to drive property sales, particularly in Dubai and Abu Dhabi, amid the pickup in economic activity.

Signs of the property recovery were evident at Cityscape on Tuesday, with developers unveiling their latest plans for new villa communities across Dubai, the commercial and trading centre of the Middle East. In the past, Cityscape, the region's biggest property event, was seen as a bellwether for the region's property market.

Dubai, which was one of the first cities to reopen its borders to international tourists in July 2020, recorded 37,537 sales transactions worth Dh88.12 billion in the first eight months of the year, about 23 per cent more than all of 2020, according to listings portal Property Finder.

New initiatives, such as visas for expatriate retirees and the expansion of the 10-year golden visa scheme, are expected to support the local real estate market, analysts say.

In October, prices in some Dubai villa communities increased 30 per cent on a yearly basis and “most of the apartment submarket continues to improve, albeit at a slower pace”, ValuStrat said.

For villas, which account for nearly 13 per cent of the residential market in Dubai, the highest annual capital gains were recorded in comparatively older gated communities such as Arabian Ranches (31 per cent), Jumeirah Islands (30.9 per cent), The Lakes (27.9 per cent) and The Meadows (26.7 per cent).

The top annual performers for apartments were located within established beachfront communities such as the Palm Jumeirah (14.6 per cent) and Jumeirah Beach Residence (12.1 per cent).

However, apartment capital values in Jumeirah Village (-6.3 per cent), Dubai Production City (-2.6 per cent) and Dubai Sports City (-2.8 per cent) recorded weaker performance.

Overall sales transaction volumes declined 4.3 per cent last month compared with September, ValuStrat said.

“Month-on-month performance saw ready sales rise [of] 6.6 per cent … however, off-plan Oqood [contract] registrations declined 15.8 per cent, representing 42.6 per cent of overall transactions,” it said.

In October, 19 property transactions were valued at more than Dh30 million, according to ValuStrat. They were concentrated in Dubai Hills Estate, Downtown Dubai, Business Bay, District One, Jumeirah Golf Estates, Emirates Hills and Palm Jumeirah communities.

Topping the sales charts in October were properties developed by Emaar (30.2 per cent), Damac (11.5 per cent), Nakheel (5.4 per cent) and Dubai Properties (4.3 per cent).

Meanwhile, top off-plan locations transacted last month included projects in The Valley, Business Bay, Dubai Harbour and Arabian Ranches phase 3.

The most transactions for ready homes were located in Dubai Marina, Business Bay, Jumeirah Village, Akoya Oxygen and Jumeirah Lakes Towers, according to ValuStrat.