Property prices in Dubai rose for the 15th consecutive quarter during the January-March 2024 period, mainly driven by affordable and mid-market communities.
Analysts say that Discovery Gardens, Sports City and Dubailand apartments saw the highest increase in prices as demand from residents and foreign investors continued to keep the prices higher.
The city is seeing villa owners renovating older units and reselling at notably higher prices to keep up with the demand.
“There are no signs of capital values slowing down yet, with city-wide sales prices rising for the 15th consecutive quarter. City-wide sales prices are up by 20% year-on-year and 66% higher than the first quarter of 2020 (pre-Covid19),” said Prathyusha Gurrapu, director and head of research and consultancy at Cushman & Wakefield Core.
Gurrapu also added that the price rise for apartments is moderate, particularly in the prime sub-markets including Palm Jumeirah, City Walk, Downtown Dubai and Dubai Marina, where sales price increases have moderated to below 20% year-on-year.
Property rallies that started after the Covid-19 pandemic continued in 2024, as prices are still much more affordable than most cities around the world, attracting a large number of investors.
As the price of rent continues to increase due to the increased inflow of foreign workers into the country, tenants are slowly becoming property owners.
“Affordable and mid-market apartment communities, owing to a lower base, have seen a sharper increase of 30% and above in Discovery Gardens (37%), Dubai Sports City (34%) and Dubailand (32%),” Gurrapu stated.
Haider Tuaima, director and head of real estate research at ValuStrat, said capital value surged by 24.7% year-on-year in the first quarter, propelled by mid-affordable communities.
Tuaima said Discovery Gardens, The Greens, Palm Jumeirah, The Views, Town Square, Al Quoz Fourth and Dubai Production City were the top performers.
According to ValuStrat data, the estimated number of newly-built units to enter the market this year is 46,558 homes. Total estimated completions as of the first quarter stand at 5,770 apartments and 1,038 villas, equivalent to 15% of preliminary estimates for the whole of 2024.
There are approximately 86,000 apartments that are currently under construction with promised handovers by 2028.
Renovating older villas to sell at higher rates
Data released by Cushman & Wakefield Core showed that the majority of villa districts experienced a year-on-year increase in sale prices of above 20%, with villas in Jumeirah Village Circle, The Lakes and Jumeirah Park seeing the highest increase.
“One contributing factor to this surge in villa sales prices, especially in older areas like The Lakes and Jumeirah Park, is the trend of renovating and reselling units at notably higher prices, thereby elevating the average price in the area. These villa districts boast central locations with well-established schools and amenities as well as spacious layouts, therefore, after upgrades, they can command and achieve substantial premiums,” said Gurrapu.
Haider Tuaima added that villas remained resilient with a year increase of 29.6%, reaching a 10-year high in prime villa values.
There are around 21,230 villas that are under construction in Dubai, which are scheduled to be delivered by 2024, according to ValuStrat.
