Property prices in Dubai continued their upward trend in November, rising by 1.17 per cent to a record high of Dh1,271 per square foot, surpassing the previous all-time high of September 2014, according to the latest figures released by Property Monitor.
After the initial recovery led by villas and townhouses, industry executives say that the apartment segment is now leading the growth phase due to high demand.
Property Monitor said prices rose at a more moderate pace last month and stood three per cent above the 2014 high.
Prices have been consistently on the rise in Dubai after the Covid-19 pandemic due to the huge inflow of foreign residents and investors, resulting in a shortage of residential units, initially in the luxury segment and now in the affordable segment as well.
As reported by Khaleej Times earlier this week, Dubai’s population grew faster than the residential property market supply this year. According to Dubai Statistics Centre data, Dubai added 100,000 new residents in 2023, while only 50,000 new properties were handed over last year. Hence, the emirate needs 50 per cent more new properties to enter the market every year to keep pace with the demand.
“Since bottoming out in October 2020, prices have gone on to increase 44.9 per cent on average, with all three residential property types experiencing varying growth trajectories… Apartments — appreciating, but not at the same pace as villas and townhouses —lagged somewhat in their recovery until the third quarter of 2022 and have since realised stronger gains while townhouses and villas have experienced muted growth appearing largely to have topped out,” said Zhann Jochinke, director of market intelligence and research at Cavendish Maxwell.
Despite reaching an all-time high, property prices in Dubai are still more affordable than in global cities such as Hong Kong, London, Paris, New York and others.
According to Property Monitor, there have been 122,657 sales transactions recorded in the first 11 months, a 40.3 per cent increase over the same period last year. it now anticipates over 130,000 sales registered by the end of the year, surpassing its initial expectations of 120,000 to 125,000.
Industry executives expect that property prices will continue to rise in 2024 but at a more steady and slower pace due to supply not being able to meet the demand.
“If 2024 passes without any natural disasters/events, Dubai will continue to thrive. Contrary to declining, it will likely set new records well into 2024, following its recent all-time high,” said Lewis Allsopp, CEO of Allsopp & Allsopp Group.