Staff Writer: TradeArabia
August 10, 2023
The number of property transactions during the first half grew 44% to 57,700 units – with 46,100 apartments and 11,600 villas sold – amid strong activity in the off-plan segment, according to property expert Savills.
The bulk of the off-plan transactions were observed for apartments, whilst villas and townhouses were preferred in the ready category, it stated.
The increase in off-plan transactions indicates buyer preference to delay committing to high lending rates in the current economic environment. It is also reflective of an increase in new project launches that have jumped to 27,900 units during H1 2023, compared to 24,900 units in all of 2022, it stated.
The bulk of the off-plan transactions were observed for apartments. whilst villa and townhouse developments were preferred in the ready category. A total of 67% of villa and townhouse transactions during H1 were for ready units.
Damac Hills 2, Al Furjan, and Dubai Hills Estate have been popular locations for ready villa units, it added.
Swapnil Pillai, Associate Director, of Middle East Research at Savills, pointed out that historically, the summer months in the UAE have been known to be slow as many residents travel during the school break.
“However, this trend seems to be changing in recent times as Dubai property continues to find favor among residents and international audiences looking for stability amid an uncertain economic environment,” he claimed.
“Whilst it is still early to comment on the overall take-up during the usually slow summer period, early indicators suggest that market activity is likely to remain strong. A total of 28,400 units were absorbed across the city in Q2, recording 33% yearly growth, with apartment units taking up the major chunk,” he added.
According to Savills, asset prices continued their upward trajectory; however, the pace of growth has slowed slightly.
The double-digit price growth that was witnessed across nearly all the micro-markets throughout most of 2022 has started to taper in locations with significant handovers and planned supply.
Meanwhile, price growth across established locations with limited upcoming supply and lower vacancy levels remained relatively more sustained, it stated.
Apartments in Palm Jumeirah witnessed one of the highest half-yearly price growths; on average, prices have increased by 19% compared to H2 2022.
Dubai Marina (14%) and Downtown Dubai (11%) were among the other high-growth markets. Other emerging locations such as Al Furjan (9%), Arjan (6%), Sports City (8%), and Town Square (5%) have also noted a marginal increase in prices, however, upcoming supply and existing vacancy levels may dent further growth.
Villas and townhouses remained the most sought-after development type. When compared to H2 2022, capital values increased by 9% across Al Furjan, 8% across Arabian Ranches, 13% across Palm Jumeirah, and an average of 14% across developments within Springs and Meadows.