Dubai’s residential real estate upswing is extending to the outskirts, with luxury project prices in key areas hitting records, according to ValuStrat, an appraisal and research firm.
The emirate’s most coveted locales follow the Arabian Gulf coast but demand is growing for homes further east toward the desert, including secondary areas like Dubai Silicon One and Dubai Sports City – where reasonably priced sites have seen record deals, ValuStrat director Haider Tuaima said.
Affordability is the primary driver as everything rises in cost, he explained, noting investors now pay higher for smaller spaces than three years ago.
The property boom follows a seven-year slump, fueled by new arrivals from cryptocurrency millionaires to wealthy Russians protecting assets. Prices jumped 9% in July 2021 from a year earlier, the largest annual increase.
Villas outpaced the 2% monthly apartment price rise. Gains accelerated in outlying places, though the apartment rebound contributed, as per ValuStrat.
In contrast to declining global markets, as rates climb, cash dominates Dubai transactions, helping propel recovery. However, growth varies – a 1.7% Remraam area apartment price increase logged 2.9% annually versus 17.9% for Palm Jumeirah islands.
Some neighborhoods saw little recent growth due to oversupply, notably apartments. But the population shift toward affordable locations is changing that, Tuaima said.
Supply will rise but demand shifted recently to more reasonable areas, with downsizing, he added. ValuStrat expects 100,000 new Dubai homes over three years, entering gradually.
Rents rebounded 22% so far in 2022 after 22.8% in June. CBRE pegs the average villa at AED 319,994 and apartments at AED 105,691 annually.