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Villa and apartment prices in Dubai continued to show signs of stabilisation at the end of 2022 and are still poised to register a citywide increase of around 7% to 10% this year due to strong demand for prime properties, according to a report from ValuStrat.
The ValuStrat Price Index (VPI), which tracks the market performance of residential properties across the emirate, slowed to less than 1% monthly increments for the last four months of 2022 to reach 86 points. Over the last 12 months, the majority of freehold locations also witnessed little or no change in capital values.
“Dubai’s residential market [is] displaying signs of price stabilisation,” the report, released on Friday, said.
Overall, residential capital values posted a year-on-year (YoY) growth of 12.7%, while rental values were up 25% YoY.
Last November, ValuStrat reported that apartment prices in Dubai were starting to stabilise after months of strong growth.
Prime market
While prices may be stabilising, ValuStrat expects citywide residential property prices to register an average growth of 7% to 10% by the end of this year.
“This would mainly be driven by the prime market – villas in general. The rest of Dubai’s residential market has already reached possible price ceilings and may witness negative growth in some areas where new supply is expected,” Haider Tuaima, Director & Head of Real Estate Research, told Zawya.
During the fourth quarter of 2022, off-plan sales volume surged by 112.1% to 15,071 transactions, while the number of deals for ready units went up by 37.3% to 11,165.
Dubai is expected to see higher visitor footfall this year following the lifting of COVID-19 restrictions in China, a major source market for the emirate’s tourism sector. Dubai will also get a boost from the upcoming COP28, which will host 140 heads of state and government leaders and more than 80,000 delegates.
According to ValuStrat, the newly launched UAE Tourism Strategy 2031 is also likely to boost tourism investment in various related sectors, including travel, aviation and hospitality.
Q4 2022 KEY INDICATORS
(Reporting by Cleofe Maceda; editing by Seban Scaria)
