Dubai’s luxury market picked up in the first half of 2017 following several years of declining prices and stagnant transactions.
Sales volume in prime neighborhoods rose 4% in the second quarter over the first and 9% since the second quarter of last year, according to a report Wednesday from luxury Dubai brokerage Luxhabitat. Total prime sales volume hit AED 3.6 billion (US$980 million) in the second quarter, up from AED 3.4 billion (US$926 million) in the first quarter.
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Dubai saw its real estate market contract dramatically in mid-2014, around the time that crude oil prices plummeted,hitting a key source of wealth for the region. Real estate prices in the emirate plunged and have stagnated ever since.
But real estate analysts in Dubai say the market has bottomed out and is now showing signs of improving. Luxhabitat reported that average prime prices have grown for three straight quarters, hitting AED 1,482 (US$403) between April and June of this year.
To analyze prime sales, Luxhabitat looks at data from information clearinghouse REIDIN for 12 luxury neighborhoods in Dubai. Of those neighborhoods, Palm Jumeirah was far and away the most expensive. The average price of a home on the manmade archipelago was AED 4.8 million (US$1.3 million) in the second quarter.
Jason Hayes, managing director at Luxhabitat, said the uptick in volume and prices in the second quarter "reflect the ongoing positivity and confidence in the market."
Second-quarter data also shows an rising interest in villas. There was a 7% bump in transaction volume for these single-family mansions, though apartments still make up the vast majority of sales. Of the 217 villas sold in Dubai’s prime quarters, the average price was AED 12 million (US$3.267 million).
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The most expensive sale in Dubai in the second quarter was a AED 90 million (US$24.5 million) villa in the Emirates Hills development, designed after California’s posh Beverly Hills, according to Luxhabitat.
The second most expensive transaction was also a villa, which sold for AED 84 million (US$22.9 million) on the Palm.