Dubai property price increase reflects healthy demand

According to Property Monitor, for the three months ending February prices increased by 4.6 percent.

The property market in Dubai is steadily displaying signs of healthy demand and stabilization. The prices have been increasing consistently during the past four months, which provides further evidence that the market bottomed out in late 2020.

According to Property Monitor, for the three months ending February prices increased by 4.6 percent. In February the price recovery gained further momentum, recording a 1.9 percent monthly rise at an emirate-wide level after a rose of 1.3 per cent in January and 1.5 per cent in December. The price per square foot now stands at USD 233, back to levels last recorded in July 2012.

Brokers report strong demand, especially in the popular locations. And further acceleration in prices is now expected as the world exits the pandemic and international travel links are restored.

As of now, the average apartment price stands at USD 205,000, townhouses cost USD 419,000 on average and villas USD 907,000.

Arabian Ranches, Damac Hills, Jumeirah Islands, Mudon and The Villa have all reported largely consistent monthly price appreciation over the past three to six months.

For nine months straight sales of completed properties dominated off-plan ones. In February, ready property transactions accounted for 68.4 percent of all sales versus only 31.6 percent for off-plan properties.

After a record-breaking volume of over 3,000 mortgages in January, where nearly 50 percent of mortgages occurred on a single day, mortgage transactions returned to expected levels in February standing at 1,465 loans.

In February, the Dh3 million-Dh5 million price tier witnessed a marked increase in popularity, rising to 12 percent from 7.7 per cent in January. This rise can largely be attributed to the launch of the Harmony Villas in Tilal Al Ghaf, which accounted for 25 percent of all transactions in this tier.

Resale transactions – subsequent sales of a property once purchased from the developer – stood at 49.9 percent of the total market in February, well above the 12-month average of 34.9 percent. This steady strengthening of the resale market is a telling sign of a maturing market where end-user and investment demand drives activity rather than speculation.