In August 2023, the ValuStrat Price Index (VPI) continued its upward trajectory in Dubai’s real estate market, showing a monthly growth of 1.9% and an annual increase of 13.8%, reaching a total of 94.6 points.
“Dubai Real Estate Valuation Continues its Upward Climb”
The August 2023 ValuStrat Price Index (VPI) displayed a robust performance, increasing by 1.9% on a monthly basis and a significant 13.8% annually, culminating at 94.6 points. This index, which initially set 100 points in January 2014, recorded apartment values at 78.5 and villas at 120.4. Notably, ValuStrat highlighted a surge in apartment sales within the affordable and mid-market segments. The VPI, designed as a valuation-based price index, serves as a barometer for reflecting the recurring changes in capital values and rental rates in the residential and commercial property sectors.
Apartments in Dubai witnessed their highest capital growth in a decade, with a monthly increase of 1.5% and an impressive annual growth rate of 10%. Key performers in the apartment segment included The Greens (14.7%), Discovery Gardens (14.1%), Motor City (13%), and Jumeirah Beach Residence (11.3%). Palm Jumeirah recorded a notable 19.3% annual growth, securing the second spot.
Villa prices saw a 2.4% increase from July to August and a substantial 18.2% annual rise. However, these figures, while impressive, were eclipsed by the remarkable 33.9% annual capital gains experienced by villas in February 2022. Leading the annual returns for villas were Jumeirah Islands (24.2%), Palm Jumeirah (22.1%), Dubai Hills Estate (22%), and Emirates Hills (20.6%). In addition, areas such as Jumeirah Park, Arabian Ranches, and Jumeirah Islands saw price increases of up to 3.2% above their 2014 highs.
Dubai Residential Citywide Capital Values Home sales increased by 1.1% on a monthly basis and 5.8% annually. Off-plan Oqood (contract) registrations surged by 13% monthly and a remarkable 40.8% annually, reaching a three-year high of 63.5% of total monthly sales. In contrast, transactions for ready homes decreased by 26.2% annually and 14.6% monthly. Notably, apartments dominated the market, constituting 95% of total transactions, 100% of off-plan registrations, and 88% of ready home title documents.
Among ready homes sold in the past eight months, the average size was 1,624 square feet, with an average cost of Dh1341 per square foot. Leading the sales lists were properties developed by Emaar (10.9%), DAMAC (10.5%), Sobha (8.7%), Danube (5.6%), Nakheel (5%), ORO24 (4.3%), and Azizi (3.4%).
In terms of off-plan sales, projects in Business Bay (15.1%), Jumeirah Village (15%), Arjan (10.4%), Sobha Hartland (9%), and Dubai Harbour (6.5%) gained popularity. For ready homes, Jumeirah Village (9.2%), Dubai Marina (8.3%), Business Bay (6.5%), International City (4.9%), and Downtown Dubai (4.8%) were among the top-selling areas. Notably, International City gained prominence among mid-market and reasonably priced locations, securing the fourth spot for cities with the most ready-to-sell homes in August. Furthermore, Arjan ranked third in terms of the highest number of off-plan registrations, while Business Bay set a new record for the most off-plan properties traded in a single month, surpassing its previous mark.