KHALEEJ TIMES, Tuesday, Mar 08, 2022 | Sha'ban
05, 1443
Dubai: 52,000 apartments, villas worth Dh114.2 billion sold in 2021
Emirates: Ultra-prime homes sales in Dubai that cost more than $10
million have reached record levels, according to a new whitepaper released by
global property consultancy
Knight Frank.
In 2021, Dubai’s residential market recorded over 52,000 apartment and villa
transactions, totalling Dh114.2 billion, more than the total for 2019 and 2020
combined.
“The international elite continue to have an insatiable appetite for Dubai’s
most luxurious homes, and this has driven $10 million home sales to an all-time
record high of 93 in 2021, more than the last 5 years combined,” said Faisal
Durrani, Partner – Head of Middle East Research at Knight Frank.
“In fact, 2021 accounts for 39 per cent of all $10 million home sales in Dubai
since 2010. This underscores the phenomenal depth of demand at the top end of
the market. And these UHNWI continue to pour into the city’s luxury residential
market from locations such as India, Russia and Europe, including buyers from
Switzerland and Monaco,” he added.
As a result, four prime areas – Emirates Hills, Jumeirah Bay Island and the Palm
Jumeirah – have together seen house prices climb by 44.4 per cent in the
12-months to the end of September 2021.
Knight Frank’s analysis revealed that the picture is however somewhat different
in the more mainstream market, particularly when it comes to apartments. The
pandemic continues to fuel the race for space as working habits shift.
Larger homes remain in high demand, and this is reflected in the fact that villa
transactions continue to climb. Indeed, in Q4, the market registered a 29 per
cent quarterly increase in the number of villas sold.
Villa prices have jumped nearly 22 per cent since the start of the pandemic,
while apartment values have not had the same increases, over the same period,
Knight Frank’s research reveals.
Is it another bubble?
“The big question on everyone’s minds is whether this is the start of another
price-bubble. And the answer is: it’s complicated, but probably not. It really
depends on which price points you look at. While supply remains a perennial
downside risk, total stock in Prime Dubai forms a fraction of the wider market,”
Durrani said, adding that in 2022, just 3.6 per cent of what’s planned will be
delivered in Prime submarkets and this is where demand continues to intensify,
suggesting there is still room for further price expansion in this segment of
the market.
“Overall, prices clearly cannot rise indefinitely and more buyers in the
mainstream market are pausing to ask if prices represent ‘good value’. Evidence
already suggests that the 21.2 per cent villa price growth of 2021 is starting
to slow. Price growth is likely to slow this year, there are no two ways about
it,” he said.
The Prime and super-prime end of the market will, however, outperform as luxury
and uber-luxury supply remains so negligible and Dubai’s handling of the
pandemic has fostered an overwhelming sense of positivity which we see reflected
in the market and economic performance, Durrani said.
Andrew Cummings, partner – Head of Prime Residential at Knight Frank Middle
East, added In December 2020 Dubai was the world’s first major city to reopen
its borders, following a single six-week lockdown, sending a very strong message
to international travellers and investors. “In such a sentiment-driven market,
this has had unintended, but positive consequences Several record-breaking deals
have been recorded since the start of the pandemic as a result of this flood of
UHNWI-linked capital,” he said.
“Indeed, a new record was set last summer with the $32.9 million sales of a
villa on Jumeirah Bay Island to a European buyer. And prior to the sale of the
Jumeirah Bay Island mansion, the most expensive home to sell in 2021 was on the
Palm Jumeirah, where One100 Palm sold for over $30 million last Spring. Land
plots too have registered record deal sizes, with a double plot on Jumeirah Bay
Island selling for Dh150 million in January 2022 – the highest price on record
for land on the island,” added Cummings.