Residential values across Dubai’s ultra-prime neighborhoods sustained its growth in the second quarter of the year – jumping by up to nearly 70 percent since the onset of the Covid-19 pandemic.
This was mostly observed in the villa market, including on the Palm Jumeirah, where the units are now 68 percent more expensive than they were in 2020, according to data from property consultant Knight Frank.
“Villas at the very top of the price spectrum in Dubai’s most expensive neighbourhoods continue to record strong price growth, which is lifting entire markets,” its head of Middle East research, Faisal Durrani, said.
Prices for villas in other prime areas such as District One and Dubai Hills Estate have also gone up by 30 percent in the last 12 months.
The increases were most likely a combination of strong demand and restricted supply, the London-based consultant said.
“The severity of the shortage of new supply, combined with insatiable international demand has driven prime residential prices up by an extraordinary 70.3 percent in the last 12 months,” according to Durrani.
Across Palm Jumeirah, Emirates Hills, and Jumeirah Bay Island, only eight new homes are expected to be delivered between 2023 and 2025.
Although this was the case, Dubai is still one of the most “affordable luxury residential markets in the world,” the Knight Frank executive said, “it is in fact four times cheaper than prime neighbourhoods in New York, or London.”
Around 82 ultra-prime deals – homes over $10 million – were already closed during the first half of the year.
“Last year, the market recorded 93 ultra-prime sales, which was an all-time record. At the time, it meant that 2021 had registered nearly 40 percent of all ultra-prime home sales ever recorded in Dubai. 2022 looks set to eclipse this by some way,” Durrani said.
The rise in prices was not only seen in prime areas, but across Dubai’s residential property market. Residential values in the emirate are now 10.1 percent higher than last summer, with prices standing at an average of AED1,100 per square foot.
The property consultant expects the prices to continue rising by up to 7 percent more the end of the year. In Dubai’s prime neighbourhoods, prices could go up by 15 percent more.
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