Dubai South has seen property prices increase 73 per cent in a year and Palm Jumeirah has the most expensive apartments, according to Knight Frank’s Autumn 2023 Dubai Residential Market Review.
The property specialist reports that in Q3 of this year residential property values in Dubai have continued their upward trajectory, marking the 11th consecutive quarter of price increases.
In the past year average residential property prices across Dubai have showed a significant rise of 19 per cent.
Dubai real estate prices
During the third quarter of 2023, average residential property prices rose by five per cent, bringing the cumulative increase to 30 per cent since Q1 2020.
Prices remain seven per cent below the peak of 2014.
Faisal Durrani, Partner – Head of Research, MENA, said: “As we approach the fourth year of sustained price increases in this third market cycle, Dubai’s prime markets remain highly sought after and are responsible for 4.8 per cent of transactions by total value that have taken place in the first nine months of 2023.
“And the ready homes market continues to dominate. Indeed, 51 per cent of transactions between Q1 and Q3 were secondary market sales, reflecting the high proportion of end-users and second-home buyers in the current market cycle”.
With a rise in the volume of product launches over the past 12 to 18 months, and as developers respond to the stable and sustained demand for homes, the quantum of off-plan homes sold has been unsurprisingly rising, Knight Frank says.
Off-plan sales for the first nine months of this year totalled AED100bn ($27.2bn) and sales for ready homes equalled AED104.9bn ($28.5bn).
Dubai property investments
Examining the market by segment, apartment prices in Dubai projected a rise of 5.1 per cent in Q3 2023, reaching over AED 1,300 per square foot (psf).
This signifies a robust 26 per cent increase since Q1 2020, although it is noteworthy that despite a significant 19 per cent increase in the past year, apartment prices remain 10 per cent below the 2014 peak.
In the villa segment, prices in Dubai experienced a 4.5 per cent increase between June and September, culminating in an average price of AED 1,580 psf.
This reflects an 18 per cent surge compared to the previous year and a 57 per cent increase since Q1 2020.
Taking a closer look at the best-performing areas, Knight Frank’s analysis concludes that apartments in Dubai South have experienced one of the strongest growth rates, with prices increasing by 73 per cent over the past 12 months.
Following closely are Jumeirah Lakes Towers (67 per cent) and Umm Suqeim Third (Madinat Jumeirah Living) (37 per cent), with approximate prices of AED1,150, AED1,780, and AED2,860, respectively.
Moreover, Palm Jumeirah continues to maintain its status as the most expensive apartment submarket, with prices standing at AED3,390 per square foot.
Notably, both The Palm Jumeirah and Umm Suqeim Third submarkets have witnessed their prices surpass Q1 2020 levels by 122 per cent and 100 per cent, respectively.
Jumeirah Islands has experienced a 65 per cent increase in villa prices in just the past year, now standing at AED 2,680 per square foot, establishing itself as the neighbourhood with the most rapid increase in villa values.
Additionally, Dubai South’s villas have recorded the most significant quarterly price change, soaring by 33 per cent during Q3.
Nick Candy, CEO of Candy Capital says: “These latest price growth highlights the unwavering confidence in Dubai’s luxury real estate market.
“The city’s remarkable trajectory, world-class lifestyle, and strategic position as a global city have solidified Dubai’s status as a magnet for the world’s elite.
“Currently, Dubai real estate remains very cheap compared to other global cities, and I believe that at the top end of the market, there will be substantial price growth over the next five years and beyond.”
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