Dubai’s residential transactions zoom to record 7-year high in Q2
Dubai witnessed a notable rise in residential transactions over the second quarter of 2021, with positive market sentiment and continued international buyer interest driving sales, According to the latest research by Chestertons, a leading international real estate services firm.
The findings, revealed in the latest Observer: UAE Q2 2021 Market Report, showed that total residential transaction value in Dubai increased by almost 50% Quarter-on-Quarter (Q-o-Q) to Dhs31.02 billion, up from Dhs20.77 billion the previous quarter. Total residential transaction value reached its highest level since Q4 2013, when residential sales totalled Dhs31.67 billion. Residential transaction volume totalled 14,426 units, a rise of 35.48 per cent from Q1 2021.
Completed property sales accounted for 71% of total transaction value and 59 per cent of volume in Q2 2021, with off-plan sales yet to approach their pre-pandemic share.
Chris Hobden, Head of Strategic Consultancy, Chestertons Mena, said: “With residential transactions at near-record levels, increased international interest has been a key factor, with Dubai’s handling of Covid-19 supporting post-lockdown demand from buyers drawn by visa reforms, the emirate’s quality of life and comparatively attractive pricing.
“We have seen a clear improvement in market sentiment among UAE residents this year, with a desire to buy ahead of anticipated price rises, coupled with favourable mortgage rates and generous developer incentives, spurring sales.” In Dubai’s villa sales sector, strong end-user demand and continued international buyer interest underpinned prices in Q2 2021. As a result, average villa prices increased by 5.7 per cent Q-o-Q, supporting a 9.1 per cent rise Y-o-Y.
The Meadows/The Springs saw the highest quarterly increases at 6.6% with average prices reaching Dhs885 per sqft, up from Dhs830 per sqft in Q1 2021. The Lakes followed closely behind with a 6.5% increase to Dhs1,065 per sqft from Dhs1,000 the previous quarter. Jumeirah Park saw prices rise by 5.4%, while Palm Jumeirah and Arabian Ranches saw 4.9% increases Q-o-Q.
On an annual basis, Palm Jumeirah was the only location to see a double-digit rise, with average prices increasing by 12.4% Y-o-Y. The Lakes and The Meadows/The Springs also saw notable gains at 8.7% and 8.6%, respectively.
Meanwhile, apartment prices in Dubai saw a modest increase, with average values rising by 0.8% Q-o-Q, although performance varied by location and prices remained 3.7% below their Q2 2020 level.
The Views recorded the highest quarterly price rise, at 5.3%, with prices averaging Dhs1,085 per sqft, up from Dhs1,030 the previous quarter. Downtown Dubai prices also increased by 4.5% Q-o-Q.
Both Jumeirah Lake Towers (JLT) and The Greens saw quarterly price rises of 3%, reaching Dhs765 and Dhs860 per sqft, respectively.
Dubai Marina, Motor City, Business Bay and International City achieved more moderate quarterly price hikes of 2.2 per cent, 1.8 per cent, 1.5 per cent and 0.7 per cent, respectively. All other locations recorded quarterly declines of between 1.0 per cent to 5.1per cent. Dubailand saw the sharpest quarterly fall, at 5.1% to Dhs590 per sqft, followed by Discovery Gardens, at 2.6 per cent, to Dhs483 per sqft.
Annually, Downtown Dubai, The Views, The Greens, and Business Bay saw prices rise by 4.4 per cent, 3.3 per cent, 2.9 per cent and 0.3 per cent, respectively with all other locations experiencing price declines of 0.2 per cent to 12.4 Y-o-Y.
In Dubai’s villa rental market, average rents rose by 2.6 per cent Q-o-Q, a modest increase in the 2.3 per cent growth witnessed in Q1. Annually, villa rents surpassed their Q2 2020 average, rising by 3.5 per cent Y-o-Y.
“The rise in villa rents was principally driven by continued tenant demand for more open space and outside areas, with agents reporting a sustained increase in villa enquiries since the easing of social distancing restrictions last year,” Hobden said.
“With work-from-home policies continuing across the private sector, even if on a part-time basis, we expect villa rents to outperform the wider residential average over the months ahead,” he added.
Palm Jumeirah saw the highest increase in villa rents, at 3.9 per cent Q-o-Q, followed by Jumeirah Golf Estates, Victory Heights and The Lakes, which recorded increases of 3.4 per cent, 3.1 per cent and 3 per cent, respectively. All other locations saw quarterly increases between 1.6 per cent to 2.3 per cent.
Meanwhile, average apartment rents in Dubai recorded modest declines over Q2, with a continued tenant preference for villas, coupled with long-standing oversupply, placing downward pressure across secondary locations. Apartment rents fell by 0.5 per cent on average and remained 8.7 per cent below their Q2 2020 level.
However, Downtown Dubai recorded a slight increase in average rents, at 1.7 per cent Q-o-Q, followed by Dubai Marina at 1.5 per cent and JLT at 1.1 per cent. DIFC saw the highest quarterly decline, at 3.4 per cent, followed by Discovery Gardens at 2.8 per cent. Both Dubai Silicon Oasis and Dubailand recorded 2.5% declines Q-o-Q.