After rallying up for two years, the property prices in Dubai are seemingly reaching a point of stabilisation. Property prices in affordable areas are beginning to become more stable, nevertheless, properties in popular locations like Palm Jumeirah, Dubai Marina and DIFC are still witnessing increasing rates. This comes to show that high net-worth individuals continue to drive property investment in these areas.
New developments are driving market demand
With 4,500 high net-worth immigrants flocking to Dubai, beachfront locations have experienced an increase in demand, driving up property prices and setting new market records.
With quarterly gains of 2% for flats and 3% for villas, the trend in sales prices appeared to be moderating. Changes during the past year were 14% and 15%, respectively.
The number of new project launches in Dubai increased in the second quarter to levels unseen since the years leading up to the global financial crisis in 2008–2009. A few more projects developed by Al Habtoor, Danube Properties, and several European developers include the multi-billion dollar Palm Jebel Ali and the $20 billion The Oasis by Emaar.
Asteco, a real estate consulting firm, reports that over the course of the second quarter of 2023, almost 11,000 residential units were delivered, with the majority of this stock—9,400 apartments—making up this total.
Where are apartment prices being affected?
About 17,000 units were delivered in the first half of 2023, and another 12,900 are anticipated to be finished by the end of the year.
Prices in the high-to-luxury end and mid-to-high end areas are increasing, albeit at a slower rate, ranging between three and four percent, according to Asteco estimates for April to June 2023.
Prices continue to climb at an average rate of 4% quarter over quarter in the Dubai International Financial Centre, Palm Jumeirah, The Greens and The Views, and Jumeirah Lake Towers.
Compared to the previous quarter, prices rose by 3% in Downtown, Business Bay, Dubai Marina, Jumeirah Beach Residence, and Jumeirah Village. Nevertheless, prices for Discovery Gardens, Sports City, and International City have stabilised, showing 0% growth in the previous quarter.
Are villas prices in Dubai being affected?
In the emirate, 3,650 villas were finished between January and June, and another 2,850 are expected to be finished by the end of the year.
The Meadows saw the largest increase in villa and townhouse prices, up 6% quarter over quarter, followed by a 5% increase in Dubai Hills Estate, Jumeirah Park, and Arabian Ranches. While Palm Jumeirah had a 2% increase in villa rates, Damac Hills 2 (Akoya Oxygen), Jumeirah Village, and The Springs all witnessed a 3% increase.
Due to the significant demand from high net-worth individuals, Downtown, Business Bay, and Palm Jumeirah have been the top performers over the post-pandemic period and have achieved record sales.
However, the market is moving toward stability and more consistent returns for investors, as evidenced by the slowing in price growth. Returns are more stable in the mid-single rate, which is another indication of a maturing market.
Conclusion
Although the market seems to be experiencing a slight plateau, properties in Dubai are still yielding a high ROI to its investors. Immigration, market stability and high salaries are factors contributing to the high property market demand from new expatriates arriving in the city. Villa communities like Jumeirah Park and Meadows are the ideal areas to invest in. Need help finding your next investment, not to worry, we will give you a hand.
