In June, capital values of residential properties in Dubai continued to rise, although there was a decrease in sales transaction volumes for the first time since the onset of the pandemic. The average valuation of freehold villas surpassed AED 10 million. The ValuStrat Price Index (VPI) reached 178.2 points, showing a 28.2 per cent annual increase and a 2.2% increase from the previous month. Villas scored 226.6 points, while apartments scored 146.7 points, both compared to the baseline of 100 points set in January 2021.
All established freehold villa communities in Dubai exceeded their previous capital value peaks from 2014. However, in the apartment submarket, only Palm Jumeirah has achieved this milestone so far. Apartment prices experienced a 1.9% month-on-month increase, leading to a record annual growth of 23.4%. Noteworthy areas with high apartment capital gains compared to the previous year include Discovery Gardens (34.5%), The Greens (33.7%), Palm Jumeirah (31.1%), and The Views (29.7%).
Villa capital gains saw an increase of 2.4% from the previous month and a significant rise of 33.4% from the same period last year. Villas in prime locations such as Palm Jumeirah, Jumeirah Islands, Dubai Hills Estate, and Emirates Hills stood out as top performers, with impressive annual gains of 43.1%, 42.5%, 38.5%, and 33.6% respectively.
According to recent data, there was a 33% annual increase in Oqood (contract) registrations for off-plan homes, but a significant 31.9% monthly decrease following a record high in May. In contrast, the volume of transactions for ready homes experienced an annual decline not seen since the beginning of the pandemic, with a 19.4% decrease since May and a 2.6% decrease compared to June of the previous year.
A total of 15 transactions were made for high-end properties with a price exceeding AED 30 million, located in prestigious areas including Palm Jumeirah, Business Bay, Jumeirah Bay Island, Emirates Hills, and Dubai Hills Estate. Additionally, the top off-plan locations that saw transactions included projects in Business Bay (9.7%), Jumeirah Village Circle (8.2%), Meydan One (6.4%), and Arjan (4.7%). In terms of ready homes sold, Jumeirah Village Circle (8.2%), Business Bay (6.7%), Dubai Marina (6%), Downtown Dubai (4.7%), and International City (3.7%) were the most popular choices among buyers.
To sum up, the June 2024 residential market report of Dubai strongly suggests that there has been a considerable rise in capital values, especially in the villa sector, which signifies robust growth in the sector whereas, on the other hand, we saw a decrease in ready property transactions coupled with a notable increase in off-plan registrations indicating the rising popularity of the off-plan segment.
For a detailed perspective on the property market, visit: Dubai - VPI Residential Capital Values - June 2024
