Allsopp & Allsopp Real Estate report an average sale price increase of 25% from Q2 2022 when compared to Q2 2021 and a 3% increase from Q1 2022 to Q2 2022. Allsopp & Allsopp also report a drop in average sale price between May 2022 and June 2022.
Lewis Allsopp, CEO of Allsopp & Allsopp says ‘The average sale price rise from Q2 2021 to Q2 2022 is to be expected. We have seen the average sales price of properties rise steadily since the end of the Covid-19 lockdown in Dubai. However, the drop in average sales price from May to June may come as a surprise to some.
Prices have been rising significantly across most Dubai communities with luxury properties seeing the most activity. What we could be seeing with this data, is the first sign of rising interest rates, an increased cost of living and a cautiousness over the global economic situation having an impact on the market. The beauty of data is that we can read into it in multiple ways, but after two years on consistent rises, I think that to have a decrease is notable.
Dubai Marina & Downtown drop in average sales price
The brokerage reported a drop in average sales price from Q2 2022 when compared to Q1 2022 in Dubai Marina, Downtown Dubai despite a rise in transaction numbers for both communities.
In Dubai Marina, Allsopp & Allsopp saw a rise in transactions by 16% but a drop in average sales price by 35% to AED 2,054,518. In Downtown, a similar story unfolded with a rise in transactions by 6%, however a drop in average sale price by 5% to AED 2,413,220.
Allsopp explains “Dubai Marina and Downtown Dubai are top communities when it comes to sales transactions. The drop in average sales price, despite the number of transactions rising in the areas shows that buyers are still active but opting for cheaper options. This could be due to affordability or investors taking advantage of the high ROI achievable in the area without having to buy the larger, more expensive units in prime towers.”
Dubai Marina & Downtown rise in average rental price
Allsopp & Allsopp Real Estate report a rise in average rental price from Q2 2022 when compared to Q1 2022 in Dubai Marina and Downtown Dubai alongside a rise in rental transactions for both communities.
In Dubai Marina, rental transactions rose by 80% with a rise in average rental price by 7% to AED 136,367. In Downtown Dubai, rental transactions rose by 11% with a rise in average rental price to AED 120,345.
Allsopp says “The rental market in both Downtown Dubai and Dubai Marina is still very strong. These communities are the go-to for expats moving to the city. With government initiatives to grow the population coming into place with visas for remote working and 100% business ownerships. This is excellent news for property investors.
A rise in average rental price and a drop in average sales price is the perfect opportunity to enter the market for investment purposes.
The Springs and Dubai Hills Estate average sales price rises but Jumeirah Golf Estates sees a drop
Allsopp & Allsopp Real Estate reported a rise in average sale price in The Springs of 8% to AED 2,795,000 in Q2 2022 when compared to Q1 with a rise in sales transactions by 13%. In Dubai Hills Estates the average sale price of property rose by 5% to AED 2,258,824 with the number of transactions rising by 27%. However in Jumeirah Golf Estates, average sales transactions dropped by 26% with a drop in average sale price by 17% to AED 6,277,760.
Lewis Allsopp explains “This is interesting as it suggests there is strong deman and performance of villas in the price range of AED 2,000,000 - AED 3,000,000, but maybe a slight cool off in higher valued properties.
High-end, luxury real estate average sales price increases but transactions fall.
Allsopp & Allsopp reports a decrease of 11% in transactions of properties over AED 10,000,000 however report an increase in luxury real estate average sale price by 62% from Q1 of 2022 to Q2 of 2022.
The luxury market is continuing on a strong trajectory in Dubai. The latest Henley Global Citizens Report ranks the UAE number one for millionaire migration and we are seeing this unfold in the real estate market. We might have had slightly less migration is Q2, however we saw the purchasing power rise by an incredible amount.
Segmenting Dubai real estate reports by community
Lewis Allsopp, CEO of Allsopp & Allsopp has often said of how the Dubai real estate market needs to be reported on in its separate communities to give a true representation of what is happening in the market on the front line.
“The difference in performance between Dubai Hills Estate, The Springs, Jumeirah Golf Estates, Downtown Dubai and Dubai Marina shows the significance of segmenting the Dubai property market into communities rather than speaking of it as a whole. The more the Dubai property market matures, the more we can see differing trends emerge across the city. We must, if reporting on Dubai's real estate market as a whole, go into depth with what is happening in each community to educate both sellers and buyers. For example an overall increase or decrease in average sales price does not mean that prices in each community are on the rise or fall. Landlords and sellers need to be aware of this in order to make informed decisions over their properties.”