The total volume of transactions in Dubai’s residential market hit 13-year high in May as the investors, high net worth individuals and entrepreneurs plan business migration to the city, experts say.
In its latest report, CBRE said the total volume of transactions in Dubai’s residential market surged 33 per cent to 5,542 in May 2022 while total transaction volumes in the year to date to May reached 30,903, the highest total recorded since 2009.
The real estate consultancy said off-plan sales sustained an upward trend and increased by 55.4 per cent while secondary market sales rose by 18 per cent in May.
In terms of price growth, the CBRE said average property rates increased by 10.9 per cent in the year to May 2022. Elaborating, the real estate consultancy said average apartment prices and villa rates rose by 9.6 per cent and 19.8 per cent, respectively, this year so far.
“Average apartment prices in Dubai stood at Dh1,102 per square foot and average villa prices stood at Dh1,307 per square foot as at May. Compared to the highs witnessed in late 2014, these rates per square foot are 25.9 per cent and 9.5 per cent below the peak, for apartments and villas, respectively,” the CBRE said in its Dubai residential market snapshot released on Tuesday.
Taimur Khan, head of research for Mena region at CBRE in Dubai, said transaction activity in Dubai’s residential market continues to remain on a strong footing, with total transactions volumes in the year to date to May 2022 reaching 30,903, the highest total recorded since 2009.
“Price growth has also remained robust, despite the rate of growth slowing marginally from a month earlier, where average sales prices grew by 10.9 per cent in the 12 months to May 2022,” Khan said.
Most preferred destinations
The CBRE report said Downtown Dubai recorded the highest average sales rate per square foot at Dh2,045 in the apartment segment and remained the most preferred destination of the buyers. In the villa segment, Palm Jumeirah stayed on top position and recorded the highest average sales rate per square foot at Dh3,207.
Another property consultancy ValuStrat said month-on-month price growth for Dubai’s villas and townhouses has been moderating since the start of the year while apartment prices almost flat. The ValuStrat Price Index recorded 33.4 per cent year-on-year price growth for villas while annual capital gains for citywide apartments averaged 8.2 per cent last month.
Ata Shobeiry, chief executive of Zoom Property, said the Dubai property market continues to grow at a sustainable pace in 2022 as the year-to-May sales transactions have reached 30,903 due to rising demand from the investors.
“The significant increase of around 11 per cent and 19 per cent in prices and rent, respectively, also shows that the market will produce high figures in 2022, despite the risk of the global recession,” Shobeiry told Khaleej Times on Tuesday.
The latest Henley Global Citizens report projected that 4,000 millionaires will migrate to the UAE this year as the trust and confidence of the high net worth individuals, foreign investors and entreprenures saw a major boost following the successful hosting of Expo 2020 Dubai and handling of the Covid-19 pandemic and they injected billions of dirhams into Dubai real estate sector.
Dubai: Capital of world real estate
Imran Farooq, CEO, Samana Developers, said Dubai is the new real estate capital of the world and the city is emerging as a new financial hub of the world too.
Referring to latest reports, he said Dubai has attracted a record 4000 new millionaires from February 2022 to May 2022, the highest number of new wealthy residents worldwide in a short span of the last five months.
“The recent migration trend has been triggered by the Russia-Ukraine conflict. But the UAE, especially Dubai, does not depend on such conflicts as it has well-established economic and trading infrastructures. Even before the Russia-Ukraine conflict, the UAE was retaining its position as a financial hub of the Middle,” he said.
He said the key attractions for foreigners, foreign investors and families are UAE’s low tax regime, the world’s fastest vaccination rates and Dubai’s success in hosting the World Expo during the harshest times of Covid-19. The country’s success in attracting tourism and trade through visa waivers has further propelled the UAE’s position among the most favourite.
“We at Samana Developers are receiving a growing number of new buyers from China, Europe, Africa and nationals of the Commonwealth of Independent States (CIS) as well as traditional buyers from India, Pakistan and the UK. The surge in new investors is a testament to Dubai’s growing attractiveness to international investors,” Farooq told Khaleej Times on Tuesday.
Rents picking up
The CBRE’s Dubai residential market snapshot said residential rents surged at the fastest rate since late 2014 as average rents in the 12 months to May 2022 have increased by 19.1 per cent, with average apartment and villa rents increasing by 18.3 per cent and 24.3 per cent, respectively. As at May 2022, average apartment and villa rents stood at Dh83,485 and Dh249,677 per annum, respectively.
“In the rental market, the highest average annual apartment and villa rents respectively were found in Palm Jumeirah, where asking rents on average were Dh213,761, and in Al Barari, where asking rents on average were Dh874,171,” according to the CBRE report.
“The rate of growth for rents has continued to increase on a year-on-year basis, where in the year to May 2022 average rents increased by 19.1 per cent, up from 16.2 per cent recorded a month earlier, this is the fastest rate of growth since October 2014,” Khan said.