[ad_1]

Villas at the very top of the price spectrum in Dubai’s most expensive neighbourhoods continue to record strong price growth, reports Knight Frank

A shortage of villas in Dubai’s prime locations, including Palm Jumeirah, Emirates Hills and Jumeirah Bay Island, are helping drive record price growth, according to latest analysis from real estate consultant Knight Frank.

“The severity of the shortage of new supply, combined with insatiable international demand has driven prime residential prices up by an extraordinary 70.3 per cent in the last 12 months,” says Faisal Durrani, head of Middle East research at Knight Frank.

Insights from the consultancy highlight that across the three communities, only eight new villas are currently under construction and will be delivered between 2023 and 2025.

“The caveat to this stellar growth is that average transacted prices in these exclusive precincts stands at AED2,900 per-square-foot, or $800, making Dubai one of the most ‘affordable’ luxury residential markets in the world,” explains Durrani. “It is in fact four times cheaper than prime neighbourhoods in New York, or London.”

Residential values have continued to rise across Dubai in recent months, and are now 10 per cent higher when compared to a similar period in 2021.

The rate at which prices are growing, meanwhile, has slowed down. Knight Frank reports that year-on-year change in villa prices has slowed from about 20 per cent at the end of March and 21 per cent at the end of 2021.

“Nonetheless, the mainstream market has seen growth of 10.1 per cent in the last 12 months, with villas continuing to lead the charge,” says Durrani. “In fact, villa values are now 19.3 per cent higher than this time last year. The emerging tone for pricing is one of less steep rises.”

Key price highlights

Palm Jumeirah: Villa prices have grown by 51 per cent in the last 12 months and by 68 per cent since the onset of the Covid-19 pandemic

District One and Dubai Hills Estate: Prices for villas have grown by 30 per cent over the past 12 months

Luxury property

Durrani expects the market to be further bolstered by ultra-prime deals, which includes home values of $10m and higher. In the first six months of 2022, Dubai has seen 82 ultra-prime deals. The market recorded 93 such deals in 2021, and Durrani expects the record will be broken in the coming months.

On the rental front, growth has kept pace with capital value increases, resulting in no yield compression.

On average, rental yields for apartments and villas in Dubai hover around 6 per cent and 4 per cent, respectively, though these figures are significantly higher in areas where demand for short term rentals is high.

[ad_2]

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *