Credit By: Khaleej Times
According to Valastro research, Dubai’s real estate market saw tremendous growth in the third quarter of 2023, breaking records and reviving investor interest in the industry. Significant changes were observed in capital gains, property appraisals, and sales transactions across various segments in Dubai’s dynamic real estate market.
Record-Breaking Villa Price Index
The Villa Price Index (VPI) in the housing sector reached a historic high in Q3 2023 with an unheard-of increase. On the Valastro Price Index, the VPI increased by 6.1 percent over the previous quarter to 96.6 points. In addition to reflecting an excellent gain, this one showed a significant rise of 15.1% over the same period last year.
Villa Valuations Reach New Heights
Villa valuations in the Dubai real estate market have increased significantly. Villa values increased by an astounding 7.6 percent quarter on quarter (Qu) and 19.8 percent year on year (YoY), culminating in a VPI of 123.6 points. Significantly, this peak was 2.6% higher than the levels recorded in 2014. During the quarter, Palm Jumeirah (9.5 percent), Jumeirah Islands (9.5 percent), Dubai Hills Estate (9.3 percent), and Mud on (9 percent) were the highest-performing locations in this category.
Apartments Showcase Robust Growth
The Valastro Price Index (VPI) for apartments increased by 4.8 percent on a quarter-over-quarter basis to reach 79.7 points, an 11 percent YoY gain. Even if the flat market expanded significantly, it is still 29.2 percent behind its 2014 peak levels. The Palm Jumeirah (6.7 percent), Dubai Land Residence Complex (6.6 percent), The Greens (7.3 percent), and Discovery Gardens (7.5 percent) were the top achievers in this category throughout the quarter.
Prime Property Valuations on the Rise
Both villa and apartment prime property valuations showed notable increases, rising 16.5 percent YoY and 6.6 percent Qu to reach 106.2 points. Specifically, prime villas saw capital gains of 20.2 percent YoY as they hit an astounding 10-year high of 135.7 points.
The Rising Off-Plan Market
The average purchase size in Dubai’s off-plan property market increased by 13% yearly to AED 2.5 million. The average transacted price for off-plan properties was AED 20,035 per square meter or AED 1,861 per square foot. The number of off-plan contract registrations rose by 2.5% Qu and 19.1% YoY, or AED 36.9 billion, in terms of investments. During the quarter, Mud on, Business Bay, and Dubai Land Residential Complex each established monthly records and had the most significant number of off-plan property purchases.
Robust and Ready-to-Install Sector
Ready (secondary) home sales continued to be strong; in the third quarter, 11,308 transactions occurred, representing a significant % YoY increase of 17.7 percent. While ready-to-move-in properties had a slight 5 percent fall from the previous quarter, the average purchase size fell by 1.4 percent year over year to AED 2.3 million. Remarkably, 52 homes valued at over AED 30 million were sold during the quarter, accounting for 41.5% of all ready home sales, primarily apartments and priced under AED 1 million.
Office Space Sector’s Impressive Growth
In Dubai, the office space market grew significantly, with annual capital gains of 25.5%. With a 100-point base in Q1 2015, the Valastro Price Index increased by 7.3 percent every quarter to reach 103 points. In Dubai, the average weighted cost of an office was AED 14,230 per square meter or AED 1,322 per square foot. Double-digit annual growth was observed in several central business districts, including Downtown Dubai, Barsha Heights, DIFC, Business Bay, and Jumeirah Lake Towers. About 252,783 square meters, or 2.7 million square feet, of construction, were expected to be finished in 2023, while another 12,680 square meters, or 136,500 square feet, were planned for 2024.
In Q3 2023, Dubai’s real estate industry produced remarkable outcomes in several categories, giving stakeholders and investors hope and confidence. The real estate industry in Dubai is a shining example of strength and resilience, with remarkable increases in office space, a robust off-plan market, and unheard-of increases in villa prices.
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