Dubai’s residential property market is forecast to scale new heights in 2024, with analysts predicting record-breaking home prices. This growth is expected to be particularly pronounced in the villa segment, which is projected to witness significant capital gains.
According to ValuStrat’s April Price Index (VPI) for Dubai, apartment prices are on a steady rise, although at a more moderate pace compared to villas. Villas were the standout performers, with the average valuation per square foot surpassing AED 2,000 for the first time in a decade. This milestone marks a doubling of villa prices since the pandemic, surpassing previous market peaks and even 2014 highs.
Capital gains in the villa segment are also expected to continue. While not quite surpassing the record set in 2022, which saw a 34. 1% price increase – the highest in a decade–analysts predict gains exceeding that mark. The April VPI data bolsters this prediction, revealing a 2.4% month-on-month rise and a staggering 31. 2% year-on-year increase in villa capital gains.
The strong performance of the Dubai real estate market can be attributed to the increase in high-net-worth individuals moving to the city, supported by government initiatives and a growing business environment. This has led to a higher demand for luxury properties, which impacts the overall market trends. Additionally, low interest rates are expected to continue, making borrowing costs favourable and encouraging more investors to enter the real estate market.
The VPI reached 170.8 points in April, marking a 26.1% annual increase, with a monthly rise of 2%. Villas reached 216 points, while apartments stood at 141.4 points, compared to the baseline of 100 points set in January 2021.
Apartment prices rose by 1.6%, marking a record annual growth of 21.3%. Among the areas with the highest apartment capital gains compared to the previous year are Discovery Gardens (33.4%), The Greens (31.4%), Palm Jumeirah (29.9%), The Views (27.1%), and Al Quoz.
Villa capital gains were at 2.4% compared to March and 31.2% since the previous year. Notably, top annual performers were villas in highly sought-after areas like Palm Jumeirah (40.1%), Jumeirah Islands (39.5%), Dubai Hills Estate (36.2%), Green Community West (31.4%), and Emirates Hills (31.1%).
Off-plan Oqood registrations saw a significant increase of 76.4% annually but experienced a monthly decline of 9.4%. Ready home transactions also rose by 9.5% since last year, although they dropped by 24.2% since March, making up only 30% of monthly residential unit sales. Notably, there were 27 transactions for ready properties priced over AED 30 million, with prime locations including Palm Jumeirah, Arabian Ranches, Jumeirah Bay Island, Emirates Hills, and Downtown Dubai.
Dubai’s property market is thriving, in line with the emirate’s economic objectives. The government is working to strengthen Dubai’s status as a global business and tourism hub, and a successful real estate sector is essential for attracting foreign investment and skilled individuals. As Dubai advances, the focus remains on the residential property market, with experts forecasting continued growth until 2024.
For a detailed perspective on the property market, visit: Dubai - VPI Residential Capital Values - April 2024
