Dubai Real Estate Prices Rise in H1, Countering Slowdown Predictions

Bayut, a leading UAE property portal, has released key insights on the most sought-after areas in Dubai’s real estate market for the first half of the year. Following a brief period of stability early in Q1 2024, property prices in Dubai’s most popular neighbourhoods have once again risen, defying expectations of a slowdown.

Despite rising prices, Dubai remains an attractive and relatively affordable option compared to other luxury real estate markets globally. This appeal has helped solidify Dubai’s status as a premier destination for both new and institutional investors.

Key Trends in Property Buying

Bayut’s data highlights an increase in sales prices for both apartments and villas in prominent Dubai areas, with The Valley by Emaar seeing villa prices surge by up to 17% in H1 2024. Affordable areas such as International City, Dubai South, DAMAC Hills 2, and The Valley have drawn substantial interest from homebuyers and investors. Mid-range property seekers are focusing on neighbourhoods like Jumeirah Village Circle, Jumeirah Lake Towers, Al Furjan, and The Springs. Luxury property investors are particularly interested in Dubai Marina, Business Bay, Arabian Ranches, and Dubai Hills Estate.

Affordable apartment prices in top-searched areas have generally dropped by up to 18%, whereas villa prices in DAMAC Hills 2 have surged by over 41%, driven by high local and international demand. Mid-tier property segments have also seen a rise, with apartment prices increasing by 12% to 40%, notably in Jumeirah Lake Towers. Mid-tier villa prices have climbed by 4% to 23%.

In the luxury segment, most areas recorded price increases between 5% and 24%. Data from Bayut’s Dubai Transactions, based on information from the Dubai Land Department (DLD), shows a total of 43,075 property sale transactions in H1 2024, valued at AED 122.9 billion.

Return on Investment Insights

For potential investors, areas like Dubai Investments Park, Discovery Gardens, and Remraam offer rental yields up to 11% for affordable apartments. Mid-tier apartments in Dubai Sports City, Dubai Silicon Oasis, and Motor City offer yields above 9%. Luxury apartments in Green Community, Al Sufouh, and DAMAC Hills have shown returns up to 9%.

Villa communities also present strong ROI figures. Buy-to-let villas in International City offer returns over 7%. DAMAC Hills 2 and Wasl Gate show ROIs above 6%. Mid-tier villas in Jumeirah Village Triangle, Jumeirah Village Circle, and Mudon have ROIs ranging from 6% to 8%. The Sustainable City leads the luxury villa market with ROI exceeding 7%, thanks to unique property features and limited supply. Other luxury communities like Tilal Al Ghaf and Al Barari offer returns over 6%.

Rental Market Trends

Bayut’s analysis reveals rental price increases across various segments. Affordable apartment rentals have increased by 4% to 31%, with Al Nahda studios seeing the highest rise. Mid-tier apartments have seen rent hikes up to 15% and luxury apartment rentals have generally increased by up to 7%.

Budget villa rentals have increased by up to 12%. Mid-tier villa rentals have risen up to 15%, with slight decreases in Town Square. Luxury villa rentals have surged up to 27%, with significant increases in DAMAC Hills’ limited 6-bed units.

For affordable rentals, Deira and Al Nahda are popular choices for apartments, while DAMAC Hills 2 and Mirdif attract villa renters. Mid-tier renters prefer Jumeirah Village Circle (JVC) and Bur Dubai for apartments, and Town Square and JVC for villas. In the luxury segment, Dubai Marina and Business Bay remain popular for apartment rentals, while Dubai Hills Estate and Al Barsha are sought after for high-end villas.

Transactional rental prices in affordable neighbourhoods have generally increased by 2% to 9%. Mid-tier rentals have seen up to 10% rises, with luxury rentals also increasing by up to 10%.

Original article reference: Zawya.

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