Dubai prime areas in demand as buyers prefer bigger homes

Dubai's prime areas have enrolled a strong growth in the past two years as investors and end-users preferred to invest in properties offering more space and facilities to enjoy a better lifestyle in the post-pandemic era, the latest data shows.

Real estate consultancy Valustrat Price Index indicated that villas and apartments in Dubai's prime locations such as Palm Jumeirah, Arabian Ranches, Jumeirah Beach Residences, The Lakes, and Emirates Hills registered double-digit growth in price appreciation and transactions in November.

The villa segment in Arabian Ranches posted a year-on-year 34.1 per cent increase in property values and 58.9 per cent growth in transactions. The Lakes villas registered 31.2 per cent price appreciation with a 16 per cent rise in sales deals, according to Valustrat Price Index.

For apartments, Palm Jumeirah recorded 17.3 per cent year-on-year price gains with a 131.1 per cent increase in transactions last month. Jumeirah Beach Residences apartments also posted 14.6 per cent growth in capital values with 68.1 per cent more sales transactions in November.

Prime locations will continue to grow

Haider Tuaima, head of Real Estate Research at ValuStrat, said residential prime locations in Dubai are in demand and their prices will continue to appreciate at a steady pace next year after staging strong growth in 2021.

“For 2022, we expect capital values of residential prime areas will continue their upward trend, but at lower growth rates averaging five per cent to 10 per cent," Tuaima told Khaleej Times on Tuesday.

"When it comes to capital gains in residential prime locations, the ValuStrat Price Index clearly shows that villas are performing much better than apartments. Villa prices are already at pre-pandemic levels, while apartments still have some way to go," he said.

"Transaction volumes increased at triple digits in some areas, even when compared to 2019, due to two main reasons. Capital values increased, but more importantly, people are buying bigger homes," he added.

Elaborating, he said average unit size increased considerably in the past two years as buyers want more space in their homes.

"In 2019, the average size of a residential unit sold was 1,524 square feet, and that figure increased to 1,905 square feet in 2020 and further climbed to 2,057 square feet,” he added.

Modern infrastructure, affordable rates

Zoom Property Insights said Dubai prime areas remained in demand because of their strategic locations, modern infrastructure and affordable rates.

The latest data compiled by the property portal showed that Dubai Marina, Business Bay and Jumeirah Village Circle are among the best areas to buy a residential unit in Dubai while Palm Jumeirah, Downtown Dubai and Arabian Ranches are equally popular in the luxury category.

Ata Shobeiry, CEO at Zoom Property, said that property buyers with limited budgets are mostly preferring suburban districts with affordable housing. However, areas closer to the Expo 2020 site have picked up the ace as well.

“The demand for properties has also increased in more established areas renowned for offering upscale lifestyle,” Shobeiry said.

Substantial growth in 2021

The Dubai property market witnessed substantial growth in 2021 after a brief setback in 2020 due to the global pandemic. The V-shaped recovery is evident as the demand and prices of properties in various areas are on the rise.

On the whole, the residential property prices witnessed a jump of 21 per cent during the first 10 months of the year, according to Zoom Property Insights.

“The fourth quarter is also expected to end on a high note as there is increased activity in the property market,” it added.

Double-digit returns

Farhad Azizi, CEO of Azizi Developments said the Palm Jumeirah has always been a sanctum for property investors, with promised double-digit returns in many cases.

"Dubai has seen a hike in transactional activity, with 16,019 units sold in the third quarter of 2021 alone, double the figures since the third quarter of 2020. Not only that, but the average apartment deal size in Palm Jumeirah has risen to about Dh2,327 per square feet, the highest since 2016,” Azizi told Khaleej Times on Tuesday.

"Due to the sophisticated, opulent, and contemporary lifestyle that it provides, our project, Mina, is in great demand from both local and foreign investors. Europeans have been investing in Dubai for holiday home purposes in the consolidation of this demand, which is a reflection of our dedication to our customers, careful attention to detail, and contributions to the development of the UAE's breathtaking scenery,” he said.

He said Mina unit prices start at Dh2,000 per square foot, ranging in total value from Dh2.6 million for one-bedroom apartments to Dh26.8 million for a lavish penthouse with a private pool.

"Over 96 per cent of this development is already sold out to more than 41 nationalities, with the remaining stock not having been released to the market yet," he added.