Dubai’s residential sector enjoyed a strong first quarter, with increased transactions, and broad improvements in villa prices, reflecting growing market confidence, according to Chestertons MENA.
Total transaction value increased by 14.4 percent compared to the previous quarter and 38.8 percent on an annual basis, with volumes rising by 5 percent and 12.1 percent respectively, the real estate consultants said.
“Overall demand appeared broad-based, with the rise in transactions driven by increased interest from international buyers as well as local investment and end-user demand,” added Chris Hobden, head of Strategic Consultancy, Chestertons MENA.
The total sales value of completed properties increased 15.4 percent compared to the previous three months and near-doubled annually, with transaction volume rising 12.9 percent and 64.4 percent respectively.
While the total value of off-plan sales increased 11.8 percent on a quarterly basis, it remained 22.2 percent down year-on-year, with total sales volume falling 6.8 percent and 28.8 percent respectively.
Off-plan sales remained low due to limited new launches, developer promotions on recently completed units and broadly attractive resale prices, said Hobden
He told Arabian Business that strong demand for villas across popular residential areas in Dubai continued during Q1, supporting broad price rises.
Average villa prices rose 3.9 percent compared to the fourth quarter of 2020 and also surpassed their Q1 2020 level, rising 1.1 percent annually.
Apartment prices were broadly stable, rising 0.1 percent on a quarterly basis but they remained 7.2 percent below their Q1 2020 average.
“However, stability in the quarterly average belies an increased divergence between the performance of more popular residential areas and secondary locations,” Hobden said.
Continued work-from-home practices, along with more flexible workplace policies, underpinned tenant demand for villas over Q1, he added.
Villa rents rose 2.3 percent quarter-on-quarter, although remained 1.4 percent below their Q1 2020 average while apartment rents fell 0.7 percent compared to Q4 2020 and remained 11.7 percent below their Q1 2020 level.
The first quarter saw notable demand for villas, with broad price rises building on the uplifts seen across several more established communities in Q4 2020.
The high-end villa segment, defined as units priced at AED8 million and above, saw particular growth, recording 207 sales collectively worth AED3.34 billion compared to 85 units totalling AED1.20 billion in Q1 2020, Chestertons said.
Overall, high-end villas represented a third of total villa sales, up from a quarter during the same period last year, it added.
Hobden added: “Interestingly, villa demand appeared broad-based, with sales supported by settled expatriate residents, in addition to a clear rise in international buyers across the high-end segment. Agents reported particular buyer interest from the UK, India and the larger Euro-zone economies.
“We expect demand for high-end villas to continue medium-term, supported by Dubai’s comparatively attractive pricing, its overall quality of life and the continued take-up of the emirate’s retirement and investment visa programmes.”