The results of 2021: A price bubble in the Dubai market?

The results of 2021: A price bubble in the Dubai market?

Fresh market news points to encouraging record sales in the ultra-premium housing sector in 2021: 93 properties worth more than USD 10,000,000 were sold.

For the emirate, this result means that 39% of all home sales worth USD 10,000,000 or more since 2010 were last year.

Such data was shared by the international consulting agency Knight Frank.

Due to the company's data, it also became known that 52,000 apartments and villas worth USD 31,090,000,000 were sold on the market last year.

This number is colossal by any measure. Even the combined sales of 2019 and 2020 are not able to beat the figures of 2021.

Nevertheless, large-sized properties remain the key product on the market. Both the pandemic and the new working conditions continue to motivate people to acquire more and more living space. Against this background, the villas continue to attract the most attention.

In the fourth quarter of 2021, a 29% quarterly increase in sales of this residential real estate was recorded. Interim data for the first quarter of this year maintain the trend.

The current situation makes people increasingly wonder if the market is entering a new price bubble? The company's analysts cannot give a confident answer. Forecasts for this problem can vary greatly depending on the point of reference taken.

For instance, for the most premium real estate, the stock of price growth is still present. Only 3.6% of the planned real estate supplies to the market will be related to this sector. At the same time, this sector is the most popular among wealthy consumers. The imbalance in the demand side justifies the current rate of price growth so far.

There is also an increase in doubts among buyers that the requested prices are justified. The price growth for the villa segment has already started to slow down. Thus, there is every reason to believe that the observed price growth will not go unchecked and will soon come to stable indicators.

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