Greetings Dear Readers,
A pleasant welcome to August. A total of nine thousand eight hundred and sixty-three residential sales transactions were concluded in Dubai in the month of July. This is an increase of almost fifty -nine percent YoY. The average price per square feet for residential transactions has registered at AED Sixteen hundred and twenty-three, this is an increase of thirteen percent YoY. Price usually follows volume, the positive increase in both metrics is both a confirmation of theory and a positive indicator for the market. The Off-Plan premium or new home premium is an important real estate market statistic and indicator. This has averaged anywhere between ten to thirty percent in mature markets like the USA and UK, over the last many years. The premium has been averaging higher in the more recent times, however. For Dubai real estate, the Off-Plan premium currently stands at around thirty five percent. While for new apartments, it is as high as forty seven percent, the situation with villas is inverted, where ready villas are commanding a premium of thirty six percent over the new inventory coming into the market. This indicator can usually give many insights into the relative valuations across market segments and overall health of the market.
The most transacted areas for the month have been Mohammad Bin Rashid City, Jumeriah Lakes Towers, Dubai Creek Harbor, Arjan and Dubai Hills Estate. The month also saw several high value ready building transactions, with one of them being a landmark unit on Sheikh Zayed Road. When corporate and institutional capital is active, it should be observed for insights. It is worth noting that the continuous positive price and volume momentum for Dubai real estate comes at a time of rising interest rates, accelerated off plan launches, global energy and food inflation and overall global economic caution. While this would lead many to consider that a phase of reckoning for Dubai real estate, is on the horizon, a more positive attitude can lead to another observation, if this is the performance in a phase of global economic caution, what are the possibilities when we are past it. Given that the city sits at the intersection of Asia, Africa and the Middle East, and that these three regions are with certainty going to be the economic powerhouses of the coming times, along with the business climate and the lifestyle the city offers, I am far more inclined to be on the positive side, especially, for the medium and long term. As always, looking forward to serving your quest for Dubai real estate. Thank you.