Dubai villas and apartments record strong capital gains in first quarter

ValuStrat Price Index covering emirate’s residential market grew 11.4% annually during the period

Villas and apartments in Dubai recorded strong annual capital gains in the first quarter of 2023 as the emirate’s property sector continues to rebound from the coronavirus pandemic.

Villas, which represent 13 per cent of residential homes in Dubai, grew by 17.1 per cent in value during the three months to the end of March while apartment values rose by 6.6 per cent, according to a report from property consultancy ValuStrat.

Jumeirah Islands, with a growth of 5 per cent, The Palm Jumeirah (4.6 per cent), Dubai Hills Estate (4.5 per cent) and Jumeirah Park (3.8 per cent) were the best-performing areas during the quarter.

The ValuStrat Price Index (VPI) covering Dubai’s residential market grew by 11.4 per cent annually to 88 points.

The VPI for villas rose 2.4 per cent on a quarterly basis, 3 per cent shy of 2014 price peaks, the report said.

The apartment VPI grew by only 1.5 per cent quarterly, 34.2 per cent below the peaks of 2014.

The top districts with the highest quarterly capital gains for apartments were The Palm, Jumeirah Beach Residence, The Greens and Discovery Gardens.

“The month of March observed capital gains of typical villas stabilise, whilst apartments witnessed marginal acceleration for the first time since the pandemic,” ValuStrat said.

The latest report comes after Dubai and Abu Dhabi property sales surged in the first quarter amid a broader recovery in UAE’s economy on the back of higher oil prices and new initiatives by the government.

Abu Dhabi’s total sales transaction value for the three months to the end of March jumped more than three times to Dh11.6 billion ($3.15 billion), from Dh3.6 billion during the same period last year, according to real estate listings website Property Finder.

Meanwhile, Dubai’s total transaction value in the first quarter stood at Dh157 billion, marking an 80 per cent annual increase, the emirate’s media office said last month.

Prime villa prices surpassed the price peaks of 2014 by 1.2 per cent in the first quarter, according to ValuStrat.

The valuation-based price index for luxury villas grew 16.8 per cent annually and 3.2 per cent on a quarterly basis.

Prime apartments recorded capital gains of 10.2 per cent annually and 1.7 per cent on a quarterly basis.

An estimated 55,863 new-build units have been put on the market so far this year while the number of total estimated completions by the end of the first quarter was 6,564 for apartments and 1,178 for villas, the ValuStrat report said.

Notable apartment completions included the Summer at Creek Beach development with 298 units, the Sunset at Creek Beach project (536), Waves Tower in Sobha Hartland (414), Binghatti Creek at Al Jaddaf development (400) and Azizi Berton in Al Furjan (245).

Based on developer schedules for 2023 handovers, preliminary estimates suggest 48,209 apartments remain under construction, with 54 per cent located in Mohammed bin Rashid (MBR) City, Dubailand, Jumeirah Village Circle and Business Bay.

An 81 per cent share of the city’s coming 7,654 villas will be concentrated in MBR City, Dubailand and Dubai South, the report said.