Dubai property market sets three new records

Eudore R. Chand

DUBAI 6 June 2021: It appears as if the property market is finally seeing a return to the good old days of records being set with a villa in Dubai sold for Dh111.25 million in March. The villa, N100 on Palm Jumeirah, was bought by a Swiss family from Monaco, reports said.

On the heels of Dubai’s second highest residential sales transaction ever in March, April saw two other record transactions take place, said Property Monitor.

  1. The sale of Villa 02 at XXII Carat (Club Villas) on the West Crescent of Palm Jumeirah for Dh105m is Dubai’s third most expensive residential property sale.
  2. Villa R-66 in Emirates Hills sold for Dh72.4m. This is the fourth most expensive sale in Emirates Hills and the highest since September 2018.
  3. Sales transactions of properties worth more than Dh10m hit another record month with 90 transactions, up 6.7% from March

Property Monitor reported that median:

  • Apartment price in March stood at Dh850,000
  • Townhouse at Dh1,535,000
  • Villa price at Dh2,728,000

It said, April, a month that typically records weak transaction volumes, saw a total of 81 villa transactions above Dh10m on the Palm Jumeirah versus 54 in all of 2020.

As new launches resume, off-plan sales volumes are starting to close the gap with completed properties. However, gross yields declined from 6.1% in March to 5.9% in April.

The report said performance was not uniform across communities. Prices have steadily recovered to record gains of 9.5% in the last six months. However, some areas are still displaying price weakness. Given this uneven performance, the strong double-digit increases recorded in certain communities are likely to slow in momentum as the recovery switches to a more sustainable pace across Dubai as a whole.

Strong April Sales: At 4,879, transaction volumes in April recorded a month-on-month increase of just over 6% and a year-on-year increase of 167.4%. It is important to consider the low base figure of April 2020 when movement restrictions were in place, impacting transaction volumes. Yet, April 2021 transactions represent the highest number of transactions this year. It also defies the trend of the month historically being slow for sales, especially after a strong start to the year.

Yields on a decline: After remaining relatively stable in the ~6.5% range through most of 2020, average gross rental yields in Dubai have started to weaken since November and now stand below 6%. On a monthly basis alone gross yields declined 3.3%, from 6.1% in March to 5.9% in April. This suggests that in many cases, property prices are stabilising or increasing in communities more quickly than rental prices, many of which are still declining.

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Dubai Gazette