Dubai rents witnessed the highest increases since 2014, with values nearly 19 percent up at the end of 2021 compared to the year-earlier period, according to new research.
Real estate consultants ValuStrat said its VPI for residential rental values grew 18.9 percent annually and 6.7 percent compared to the third quarter of last year.
As expected, villas and townhouses led the growth with rental values up by 26.8 percent year-on-year at the end of 2021 nad by 6.3 percent on a quarterly basis.
Apartments lagged with annual improvements of 14.3 percent although increases jumped by 6.9 percent compared to Q3.
Dubai’s citywide residential net yields fell slightly to an average of 5.9 percent, with apartments at 6.2 percent and villas at 3.7 percent, ValuStrat added in its Q4 report.
Exceeding previous forecasts, the valuation-based house price index VPI expanded 16.6 percent annually and 5.1 percent quarterly.
On the submarket level, villas and townhouses soared 31.6 percent during 2021 and 8.3 percent compared to Q3 while apartments improved by just 6.9 percent year-on-year and by 2.7 percent quarterly.
ValuStrat’s report also noted that the total estimated completions as of the fourth quarter stood at 24,196 apartments and 5,767 villas, equivalent to 53 percent of preliminary estimates for this year.
Q4 recorded the highest residential quarterly transaction sales volume in history, with 7,107 off-plan sales, up 112.3 percent, totalling AED15 billion and 8,129 ready sales, growing 55.2 percent with a total value of AED20.6 billion
Demand for larger living space continued as average areas of homes purchased in 2021 increased to 2,056 sq ft compared to 1,905 sq ft in 2020 and 1,528 sq ft in 2019.
Ticket sizes of off-plan homes jumped 68.3 percent annually to AED2.1 million while ready-to-move-in properties grew 16.8 percent to AED2.5 million.
According to ValuStrat, Dubai office capital values increased 17.3 percent compared to Q4 2020 and by 6.4 percent compared to Q3 2021.
The VPI registered 69.7 points in Q4, surpassing pre-pandemic times, but still 30.3 percent lower than 2015.
Office space in Jumeirah Lake Towers and Dubai International Financial Centre (DIFC) recorded their highest annual price gains of 19.1 percent and 18.9 percent respectively.
ValuStrat also said that due to high demand, capital values of grade A shell and core commercial space soared 26.9 percent when compared to the same period the previous year.
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