Rally in the Dubai residential property prices has broadened to the affordable segment for the first time since the pandemic, according to ValuStrat’s second-quarter estimates.
The price increase has been notable in Discovery Gardens, Motor City, The Green and Production City, said the real estate valuation and advisory services firm.
The rally in the local property prices has been led by the ultra-luxury segment after the pandemic as a large of high net-worth individuals – mostly from India, Europe, Russia and other Asian countries – flocked to the country, attracted by safety, quality of life and the world-class healthcare system. Prices in high-end areas more than doubled with individual unit prices hitting record highs in the past two years.
“In an intriguing turn of events, the affordable segment of the market witnessed evident capital gains for the first time since the pandemic; lower priced and high-yield areas observed notable quarterly growth, such as Discovery Gardens (4.5 per cent), Motor City (4.3 per cent), The Greens (3.9 per cent), and Dubai Production City (3.4 per cent),” said Haider Tuaima, director and head of real estate research at ValuStrat.
Redseer Strategy Consultants said long-term growth in the local real estate market is fuelled by three factors – affordable real estate investments, rising residential rents, and government deregulation.
“The government has implemented initiatives to stimulate growth and attract expatriates, such as allowing full company ownership without a local sponsor and introducing a post-retirement visa for expatriates. These developments have increased residents’ confidence and intent to purchase property within UAE, which will drive more long-term growth for the sector,” the consultancy said in a note about the UAE property.
The study attributed the boom in the UAE real estate market to Russian expats and local buyers. “In the short term, Russian expats are fuelling the market, while in the long term, local buyers will drive growth,” it said.
According to ValuStrat, quarterly off-plan sales fell for the first time this year, most likely due to the relatively quiet Ramadan season and two Eid holidays falling during the period.
Whilst off-plan sales volumes were up 75.7 per cent year-on-year, on a quarterly basis, they were 10.6 per cent below the record-high first quarter of the year. However, a new record was set in Q2 with ready home sales transactions, up 11.8 per cent year-on-year and 9.3 per cent quarter-on-quarter.
For a detailed perspective on the property market, visit: Dubai - Real Estate Review Q2 2023