The significant price rises recorded earlier in the year are slowing against a backdrop of rising interest rates and new supply
“The
villa submarket continued to perform, albeit at a slower 1.3 per cent
month-on-month expansion,” its August report said.
Apartments,
which represent the majority of Dubai's residential market, “gradually
approached possible price ceilings with a modest 0.7 per cent monthly rise”, it
said.
The
residential ValuStrat Price Index (VPI) rose 1 per cent monthly to 83.1 points
last month. The 100 base points were set in January 2014.
The
VPI for the villa segment was up more than 28 per cent annually to 101.9, while
the apartment VPI stood at 71.4 points, an increase of about 8 per cent year on
year.
Dubai
property prices, particularly in prime areas, have increased over the past 12
months on the back of the wider economic recovery in the UAE from the
coronavirus-induced slowdown.
The
city has reported an influx of high-net-worth individuals and its market has also
been buoyed by the success of the UAE's golden visa programme.
In
July, Dubai also recorded the highest number of sales transactions in the past
12 years, according to Property Finder.
However,
rising interest rates are expected to taper price growth in the latter part of
the year.
“Demand
for residential properties has reached an all-time high this year, but this
trend could change due to the rising cost of living, increasing mortgage rates
and anticipated new supply,” Haider Tuaima, director and head of real estate
research at ValuStrat, told Reuters.
Average
villa prices were up 28.1 per cent annually in August, ValuStrat said. The top
performers were Arabian Ranches (33.3 per cent), Jumeirah Islands (31.9 per
cent), Palm Jumeirah (29 per cent) and the Meadows (28.8 per cent).
Meanwhile, apartments recorded a more moderate 7.9 per cent average
annual increase, with the highest growth registered on The Palm Jumeirah (18.2
per cent), Burj Khalifa (16.7 per cent) and Jumeirah Beach Residences (13.7 per
cent).
The
volume of residential sales transactions also jumped 80.4 per cent annually and
40.8 per cent monthly in August, ValuStrat said.
A
total of 25 transactions valued at more than Dh30 million ($8.16m) were
recorded last month. One transaction involved a villa located in Jumeirah Bay
Island, which sold for Dh115m, while the largest penthouse at Atlantis The
Royal Residences on The Palm Jumeirah sold for Dh163m.
The
top off-plan locations for transactions in August included projects located in
Damac Lagoons (14.3 per cent), Business Bay (12.1 per cent), Jumeirah Village
(10.4 per cent), Arjan (8.8 per cent) and Downtown Dubai (7.2 per cent).
Industry
experts told The
National last month that demand in the UAE’s mortgage market is
being driven by “Fomo [fear of missing out] buyers”, as potential home owners
rushed to the market amid rising prices.
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