House prices in Dubai during Q2 2021 accelerated at their fastest pace since the summer of 2014, according to the latest research by global property consultancy, Knight Frank.

Faisal Durrani, Partner – Head of Middle East Research, Knight Frank, explained, “The momentum that began building late last year has been sustained and we are seeing a slow, but steady upward creep in transacted values. The confidence that has been injected into the economy by the government’s phenomenal response to the pandemic has percolated across the economy – buyers feel more confident about life and are committing to home purchases in increasing numbers. And not just that, it’s larger homes – villas – that are seeing the sharpest rebound, with prices now about 17% below the last market peak six years ago.”

While average prices remain 26.3% down on their previous highs, certain buyer groups have weathered the market’s lobsided performance, with certain nationalities enjoying significant price appreciation. Factoring for currency wobbles against the UAE dirham since the summer of 2015 reveals a very different picture of when it comes to investor beneficiaries.

Durrani added, “Egyptian pound purchasers for instance have seen their investments appreciate by an impressive 51.4%, while Pakistani rupee buyers are currently enjoying gains of over 12%. And if we rewind further back in time to the heady days of 2007, Egyptian and Pakistani buyers would have seen their investments increase in value by a staggering 200% plus. European buyers meanwhile would be looking at gains of 20.5% since 2007, while for British buyers, it would be nearer 68%. The flipside to the story is of course some of those who held off, or were unable to step onto the property ladder, relative prices are much more attractive today than they were in 2015”.

Sterling buyers would find a home in Dubai 19% cheaper today than in 2015, as would Indian (-14%) and Euro (-32.3%) denominated purchasers, which is why buyer groups from these locations so active in the market.

“It’s still early days, but as the global economy revs back up to full steam, some of these currency discounts are already showing signs of stabilising, or even reversing, which will no doubt up the ante for those who have been waiting on the sidelines for the right time to invest”, said Durrani.

Knight Frank highlights that certain pockets of the market are rebounding faster than others, such as villas, so it is no surprise that multi-million dirham home sales are also registering a spike in deal activity, with AED 20 million homes in particular remaining in high demand.

Knight Frank’s research reveals that 128 AED 20 million plus homes have sold between January and June 2021, the highest level since 2015, when 137 deals in this price bracket were recorded. Last year, a total of 75 AED 20 million plus homes were sold.

“Rather than subdue super prime sales activity, the pandemic has accelerated it. Families are looking for larger homes, with more outdoor space and even room for a home office as many are hedging their bets on greater remote working going forward, echoing what we have been seeing elsewhere in the world. And what’s more, they are willing to spend more for the privilege”, concluded Durrani. 

Maria Morris, Partner, Head of Residential at Knight Frank Middle East commented “Dubai’s prime and super-prime residential markets have continued on an impressive upward trajectory in the first half of 2021, with both local and global buyers continuing to see the appeal of Dubai for luxury real estate investment. This uptick in the Dubai property market has certainly been driven by various factors, such as the UAE’s impressive COVID-19 vaccination levels and the Government’s remarkable reaction to the global pandemic, which has helped economic activity in the UAE to recover post-lockdown.

Other UAE Government initiatives such as the introduction of remote work visas, the introduction of the Golden Visa and 100% foreign company ownership have also been influential in increasing the appetite for real estate in the region.”