Residential People has witnessed that Dubai’s property market has experienced a remarkable turnaround in property prices during the United Arab Emirates’ Year of the Fiftieth’.
Billed as a 50-year celebration of the founding of the UAE, the Year of the Fiftieth has seen house prices in Dubai jump by 21%, as the average price per sq ft rose from 1,021 AED in January to 1,235 AED in October.
Faisal Durrani, Partner – Head of Middle East Research, Knight Frank, said: “Excellent governance has always been a defining feature of the United Arab Emirates. And the post-COVID bounce currently underway in Dubai’s real estate market, which is driving the emirate’s third property cycle, is a reminder of the authorities’ phenomenal response to the pandemic.”
However, despite the recent exponential rise, house prices in the 18 months of the pandemic and the subsequent global financial crisis, house prices in Dubai have receded by 32% overall during this time.
Buoyed by the lower prices, Dubai has reportedly seen an influx of foreign buyers from locations such as Monaco, Switzerland and China that are pushing for more luxury homes at lower prices.
Despite the clamour for luxury, however, Knight Frank states that more modestly priced properties continue to languish, however with values overall still some 29% below the 2014 peak.
According to Knight Frank’s research, the most expensive areas in the city are experiencing the sharpest turnaround in values, with apartments in locations such as The Palm Jumeirah up by +14% and Downtown Dubai up by +8%.
Durrani concluded by stating: “There are many reasons the UAE’s 50th birthday will be remembered, and there are very early signs to suggest that 2021 may also end up marking the peak of Dubai’s third property cycle. While values are still creeping up, anecdotal evidence points to an emerging delta between seller and buyer expectations, a classic sign of a rising market that may soon stall. In fact, total transaction volumes in October declined to AED 11.2 bn, still marking the busiest ever October for the market, but a decline on the previous month, nonetheless.
“Average transacted prices are up 21% so far this year but remain 20% below the pre-GFC peak. Dubai’s relative affordability compared to other global gateway cities has been instrumental in driving its popularity and it wouldn’t be in the interest of market stability for prices to race past the 2008, or indeed 2014 peaks over such a short period of time.”