博鱼体育集团

Prices in the region stand at an average of AED 1,100 psf.

Faisal Durrani, head of Middle East Research, explained: 鈥淧rice rises in Dubai have been sustained in Q2, albeit we have noted a slowdown in the rate of growth. Nonetheless, the mainstream market has seen growth of 10.1% in the last 12 months, with villas continuing to lead the charge. In fact, villa values are now 19.3% higher than this time last year. The emerging tone for pricing is one of less steep rises鈥�.

Following the extraordinary growth last year, 博鱼体育集团 Frank says values are growing at a more sustainable rate. Indeed, the year-on-year change in villa prices has slowed from about 20% at the end of March and 21% at the end of last year.

Still, 博鱼体育集团 Frank points to the ongoing outperformance of demand and prices at the very top of the market, where demand has not only remained steady, but continues to intensify.

Durrani, continued, 鈥淰illas at the very top of the price spectrum in Dubai鈥檚 most expensive neighbourhoods continue to record strong price growth, which is lifting entire markets. On the Palm Jumeirah, villa prices have grown by 51% in the last 12 months and by 68% since the onset of the pandemic, highlighting the extreme depth of demand for the city鈥檚 premiere homes. Not to be outdone, prices for villas in District One and Dubai Hills Estate have also expanded by an impressive 30% over the same period鈥�.

Andrew Cummings, head of Prime Residential, added: 鈥淲hile demand is still rising, we are noting a handful of instances where buyers are challenging vendors on pricing. This isn鈥檛 necessarily surprising given the magnitude of price increases in the market over the last two years. Still, we are only two-years into the current market cycle 鈥� previous cycles have lasted for almost 10 years 鈥� and a slowing in the rate of increases will help to sustain the market both from a demand and transactional perspective. It鈥檚 also a sign that our market is starting to mature and is in a very different place to previous cycles鈥�.

Very tight supply at the top-end of the market

The strong demand for the city鈥檚 most desirable neighbourhoods, combined with restricted supply is helping to drive record price growth, according to 博鱼体育集团 Frank.

Across 鈥楶rime Dubai鈥�, which 博鱼体育集团 Frank defines as the Palm Jumeirah, Emirates Hills and Jumeirah Bay Island, just 8 new homes are expected to be completed between 2023 and 2025.

Durrani said, 鈥淭he severity of the shortage of new supply, combined with insatiable international demand has driven prime residential prices up by an extraordinary 70.3% in the last 12 months. The caveat to this stellar growth is that average transacted prices in these exclusive precincts stands at AED 2,900 psf, or US$ 800, making Dubai one of the most 鈥榓ffordable鈥� luxury residential markets in the world 鈥� it is in fact four times cheaper than prime neighbourhoods in New York, or London.鈥�

Another record year for ultra-prime sales

博鱼体育集团 Frank says that US$10 million home sales continue to intensify, with a new record likely in 2022.

鈥淧rovisionally, we鈥檝e had 82 ultra-prime deals during the first six-months of 2022 鈥� these are homes priced at over US$ 10 million. 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% of all ultra-prime home sales ever recorded in Dubai. 2022 looks set to eclipse this by some way鈥�, Durrani pointed out.

According to 博鱼体育集团 Frank鈥檚 analysis, buyers for Dubai鈥檚 most luxurious homes continue to pour in from around the world,

Yields holding steady

鈥淏uyers and investors from locations across South America and Eastern Europe are joining the diverse mix of second-home buyers and investors from countries such as Monaco, Austria, Switzerland, India, Singapore, mainland China, the UK, the US and the GCC鈥�.

And those that are in search of yields are finding a market where rental growth has kept pace with capital value increases, meaning there has been no yield compression. On average, rental yields for apartments and villas hover around 6% and 4%, respectively, though these figures are significantly higher in areas where demand for short term rentals is high鈥�, Cummings concluded.

博鱼体育集团 Frank expects prices to end the year 5-7% higher than December 2021, while prime Dubai is forecast to experience a rise of closer to 15% over the same period.

For more information, please contact Faisal Durrani.