The latest Dubai 2nd quarter real estate review report from ValuStrat, a globally recognised consultancy specialising in multi-sector advisory services, has revealed insightful dynamics in Dubai’s real estate market. The report comprehensively analyses the residential, commercial, and hospitality sectors, underscores a market showing robust growth and market activity.
Haider Tuaima, Director and Head of Real Estate Research, shares his synopsis of Dubai’s real estate market.
According to him, the Dubai real estate market has shown impressive growth and resilience in recent months. The ValuStrat Price Index for Residential Capital Values increased by 6.4% quarterly and 28.2% annually, reaching 178.2 points. Despite severe flooding caused by record rainfalls in April, the quick and effective response from developers and authorities helped to control the damage, ensuring that market activity and property valuations remained robust in the subsequent months.
Prime properties, known for their superior views, amenities and layouts, saw prices rise by 29.9% annually and 6.5% quarterly, setting a new record at 184.3 points. Premium apartments are catching up with villas, with capital gains increasing by 23.1% annually and 4.8% quarterly, reaching 156.5 points. Notably, Palm Jumeirah surpassed the 2014 price peaks for apartments in Dubai, the first apartment location to do so. Off-plan Oqood (contract) registrations grew significantly by 61.4% compared to the previous year and 19.1% quarterly. However, the average ticket size of off-plan homes fell by 10.5% annually.
While Q2 saw transactions for ready homes decline for the second quarter in a row, they were still 4.8% higher when compared to last year. The average ticket size for ready properties grew by 7.6% quarterly and 4.7% annually.
Office unit valuations in Dubai surged by 31.7% annually and by 9.4% on a quarterly basis, marking the 13th consecutive quarter of growth and the highest quarterly increase in a decade. This surge reflects a sustained demand and limited supply of high quality office space in well connected locations. Office sales grew by 9.5% QoQ and 1.9% YoY. Office asking rents remained stable after record highs in the previous quarter, showing an increase of 31.2% compared to the same period last year.
He concludes that Dubai's real estate market continues to thrive with strong demand. The upward trend in valuations and rents across various segments shows that the market cycle is in its upswing stage, demonstrating resilience and growth, making Dubai a key player in the global property market. As the market stabilises and matures, monitoring these trends and adjusting strategies accordingly will be crucial to maximising investment returns. However, the decline in transaction volumes calls for a closer examination of market dynamics as stakeholders navigate this evolving landscape.
To learn more about ValuStrat's real estate market capabilities and our research outputs, please visit ValuStrat's Insights Webpage.
About ValuStrat:
ValuStrat is an international consulting group providing Advisory, Valuations, Research, Transaction Advisory, Due Diligence and Industrial Consulting services, working across various industry sectors. With 45+ years of experience, Thursday, 25th July 2024
a network of 13 offices in 5 countries and a client base of 1,000 corporations across the Middle East, UK, Europe and Africa, ValuStrat assists diverse clients, from governments, multinationals, large local corporations and financial institutions to startups, SMEs and family businesses. For Valuation services, it is the preferred service provider to over 120 financial institutions across the EMEA region.
For a detailed perspective on the property market, visit: Dubai - VPI Residential Capital Values - June 2024
