Dubai property prices, rents growing at the fastest rate since early 2015

Over 10% hike recorded in prices and rents across Dubai last month; Downtown Dubai, Palm Jumeirah and Al Barari remain most sought-after areas in January

Dubai’s property market continued its strong upward momentum in January as residential prices and rents climbed at the fastest rate since early 2015, the latest data shows.

The residential market recorded 80.2 per cent year-on-year growth in transaction volumes last month as off-plan and secondary market sales surged 187.5 per cent and 32.5 per cent, respectively.

According to Dubai residential market snapshot released by CBRE, the average property prices increased by 10.2 per cent in January 2022.

The real estate consultancy noticed 8.5 per cent average increase in apartment prices and 21.8 per cent hike in average villa rates last month as apartment prices stood firm at Dh1,085 per square foot while villa rates climbed to Dh1,250 per square foot.

“These rates per square foot are 27.1 per cent and 13.5 per cent below the peak, for apartments and villas, respectively, if we compared to the highs recorded in late 2014,” CBRE said.

The real estate consultancy said Downtown Dubai has recorded the highest average sales rate per square foot at Dh1,958 for apartments while Palm Jumeirah witnessed the highest average sales rate per square foot at Dh2,699 for villa segment.

Rents on the rise

CBRE report further said average rents in the 12 months to January 2022 have increased by 10.1 per cent, with average apartment and villa rents increasing by 8.3 per cent and 22.8 per cent, respectively. In January, average apartment and villa rents stood at Dh76,347 and Dh230,275 per annum, respectively.

Downtown Dubai remained a most popular area for apartments as average asking rents rose to Dh150,723 per annum while Al Barari emerged as most-after locality for villas with average asking rate of Dh798,374 annually.

Heading towards peak

Taimur Khan, head of Research for Mena at CBRE in Dubai, said growth momentum for both transactions volumes and prices increased in January, as Dubai’s residential market continues to register record levels of activity.

“Looking ahead, we expect that market activity will continue to be robust, however, we do expect the rate of price growth to moderate,” Khan said.

Ata Shobeiry, CEO at Zoom Property, said the Dubai real estate market will sustain an upward growth momentum this year.

“With a 33.4 per cent increase in property prices in January, the Dubai real estate has started the year on a high note. This is an indication that 2022 will carry on the momentum that started in 2021,” Shobeiry said.

“The villa segment will continue its dominance, while the apartment market will become more stable. I believe expatriate-friendly policies, visa reforms, and the transition of Expo 2020 into District 2020 are going to be the key factors that will drive the upwards trend,” he said.