Dubai prime residential property market records 3rd highest growth in 2021

Dubai’s prime residential property prices jumped 17.4 per cent in 2021, the third-highest among the world’s top cities, but they’re still undervalued when compared to the city’s global counterparts.

The prime residential property capital value in the City of Gold reached 2008 level in the second half last year as demand outstripped existing supply, led by foreign investors, especially high net worth individuals, who flocked to the emirate in 2021 to cash in on competitive rates and also due to the successful handling of the Covid-19 pandemic by the government, said Savills World Cities Prime Residential Index.

“The stellar performance of Dubai in our research findings is proof of the successful efforts of the government in making the emirate a destination of choice during the pandemic. Prime capital values in Dubai are still undervalued compared to its global counterparts which will set the stage for further price appreciation in 2022, albeit at a more sustainable level,” said Swapnil Pillai, associate director of Savills Middle East Research.

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Savills data showed prime property prices in Dubai average $630 per square foot as on December 2021, much lower than Hong Kong ($4,530), New York ($2,580), Geneva ($2,250), Tokyo ($2,220), Shanghai ($2,200), London ($2,090), Sydney ($1,990), Seoul ($1,910), and Seoul ($1,910).

2022 yet another good year

Analysts see this upward trend in prime residential units continuing in 2022.

Savills analysts expect prime residential property capital value in Dubai will see another four to six per cent increase in 2022.

Honey Deylami, associate director of Luxhabitat Sotheby’s International Realty, expects 2022 to be the best year yet for Dubai’s luxury property market.

“I believe that we are still short in stock of premium and luxury properties, specifically larger apartments, penthouses and luxury beachfront or golf course view villas. I expect a strong market in 2022 especially in the luxury market segment as we still see strong demand in those areas and not enough supply,” said Deylami.

According to Luxhabitat Sotheby’s International Realty, Dubai’s prime residential market received a 5.27 per cent surge in volume in Q4 2021 at Dh17.07 billion. The residential market also saw an increase in prices by 41 per cent, with an average price of prime property at Dh4.6 million. Over 5,200 apartments and 552 villas were transacted in Q4 2021 in the Dubai prime residential market, said Luxhabitat.

The top three areas in terms of sales volume were Palm Jumeirah, Downtown Dubai and Business Bay. In the prime residential market, the Al Barari area showed the highest growth of sales owing to new launches, followed by Jumeirah and Arabian Ranches 1.

Dubai rentals see the biggest jump

According to Savills report, high-end areas in Dubai saw rental growth of 25 per cent last year, the highest among 30 cities listed in the index, fuelled by national government measures and the return of professionals to the city.

Paul Tostevin, head of Savills World Research, said Dubai, Miami and Lisbon have benefitted from the flexibility of remote working, the desire for more space and the influx of expatriate professionals.

The other cities that witnessed a massive increase in prime residential properties are Miami, Moscow, London, Singapore, Berlin, Hangzhou, New York, Seoul and Guangzhou.

— waheedabbas@khaleejtimes.com

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