While overall property values are still to reach the bottom, luxury property in Dubai is already on an upward trend backed by higher sales, local realtors said.
One agent pointed towards a “large increase” in the values of villas on the Palm Jumeirah, while prices for Emirates Hills villas had appreciated by between 10 and 20 percent in the first half.
“We have seen a definite increase the amount of AED 5,000,000 plus sales this year especially those in the AED 15,000,000 plus category,” said David Terry, luxury sales manager at Luxhabitat.
“Various properties across Dubai but mainly on Palm Jumeirah, Emirates Hills, DIFC, Al Barari and in Dubai Marina have sold in this higher bracket in the past six months.”
Terry said that the number of sales in the first half “may even be as much as double or triple” those seen in the same period last year.
Overall Dubai property prices are estimated to have dropped by more than 60 percent from their peak in 2008. Real estate consultants have warned of a two-speed market, where prices for units in desirable and well-maintained areas remained strong, while properties in distant areas with poor infrastructure will continue to sink.
Another agent said that high-end Palm Jumeirah values were “almost back to pre-crisis levels”, helped by speculative interest last year now turning into firmer offers.
“This time last year, there were buyers looking for high-end properties, but they still felt that the market had a ways yet to fall and these buyers were still looking for good deals,” said Tom Bunker, investment sales consultant at Better Homes.
“Today, those buyers are still around but now they appear to be buying as they feel the market for high end properties has bottomed out and now is the time to buy.”
Research conducted by Arabian Business in July showed that asking prices for Palm Shoreline apartments – rather than villas – had dropped to 70 percent from their peak, to as little as AED650 per square foot.
However, Carl Allsopp, the managing director of Allsopp & Allsopp warned sellers not to raise price bars too high, too soon.
“There are certainly areas in Dubai where sellers are demanding more money, but that is not say these are achievable,” Allsopp said.
“Dubai has been a challenging market for some time, and to expect an immediate recovery and for prices to increase is unrealistic; in time most certainly.”