Rental & Sales Prices in the Dubai Real Estate Market Continue to Grow Significantly

Residential rental prices in Dubai have grown by 23.7% over 2022. The rental prices on Palm Jumeirah, Dubai Marina and Downtown Dubai have grown by 39.8%, 35.7% and 38.4% respectively. This is the highest growth in costs since 2014.

As of July 2022, the average annual rental prices for apartments and villas in Dubai were AED 86.7K (USD 23.6K) and AED 261K (USD 71K), with the highest rates being on Palm Jumeirah (AED 219.8K or USD 59,8K) and in the Al Barari area (AED 925K or USD 252K).

In addition, the emirate’s total number of real estate transactions for July 2022 reached 6,524, which is up by 58% from July 2021. The average prices have gone up by 9.9% in the year to July 2022, while costs for apartments and villas grew by 8.7% and 17.8% respectively. In July 2022 Dubai real estate transactions hit a 12-year-high and reached AED 20.9B (USD 5.7B)

Overall, since the start of the COVID-19 pandemic, residential property prices have risen by almost 70% in Dubai’s high-end districts, particularly affecting properties such as villas on Palm Jumeirah, while apartments have seen a 68% increase. In Dubai Hills Estate and District 1, villa prices were up 30% year-on-year.

Such a high demand can be explained by spacious layouts, a great number of amenities, strategic locations, maximum comfort and security, as well as a shortage of new properties. For instance, only eight new home developments are planned to be completed between 2023 and 2025 in premium areas such as the Palm Jumeirah, Emirates Hills, and Jumeirah Bay Island.

The rise in prices have been seen not only in premium communities, but throughout the rest of the emirate. Thus, the value of residential properties is 10.1% higher in comparison to summer 2021, and the average price is AED 1.1K (USD 300) per sq. ft. In the H1 2022 about 82 ultra-luxurious deals (homes over USD 10M) were closed, while the total number of these types of deals in 2021 were 93, which makes us predict that the record will be broken before the end of 2022.

Experts predict that by the end of 2022 the prices of apartments and villas in Dubai could rise by an average of another 7% and the cost of premium housing could rise by 15%. However, despite this, the market of luxury real estate in the emirate will continue to flourish in the second half of 2022, remaining more accessible in comparison with other markets of the elite segment, where investments in luxury properties are much cheaper than in Europe and the US.