Dubai real estate achieves unprecedented milestones in 2023
New records set for volume and value of sales transactions.
2 min
In a groundbreaking year for the Dubai real estate market, 2023 witnessed historic highs in both transaction volume and value, solidifying the city’s position as a global real estate powerhouse. The records set in 2023 underscore the resilience and attractiveness of Dubai’s property market, even amid global economic challenges.
Soliman Hossameldin, Director of Digital Marketing at D&B Properties, expresses his perspective on the achievements, stating: “The remarkable successes in Dubai’s real estate market in 2023 underline the dynamic nature of the landscape, continuing to capture the attention of investors and residents worldwide. These milestones truly emphasize the strength and maturity of Dubai’s real estate sector.”
The key highlights of Dubai’s real estate achievements in 2023 include:
1. Record-breaking Transactions: The volume and value of sales transactions reached unprecedented levels in 2023, surpassing all previous records. Notably, average prices in September 2023 exceeded the peak set in September 2014, maintaining an upward trajectory throughout the final quarter despite a dip in off-plan transactions.
2. Tenant to Buyer Transition: A combination of rising rents and a desire for long-term stability has driven tenants to transition into buyers, defying higher interest rates. D&B Properties observed a significant shift toward domestic demand, with the percentage of buyers identifying as end users increasing from 38% to 44%. This shift signals the maturation of the market and instills confidence in greater price stability.
3. Population Surge: Predictions for an increase in new Dubai residents proved accurate, with the population surpassing 100,000 in 2023. The rapid growth cements Dubai as a preferred destination for global citizens, drawn by the promise of a safe haven, unparalleled lifestyle, and a favorable business and tax environment.
4. Supply-Demand Dynamics: The number of new properties handed over in 2023 remained relatively unchanged from the previous year, failing to keep up with the speed of Dubai’s population expansion. This supply-demand imbalance put pressure on rents, resulting in a 24% increase in the average rental price. More tenants are opting for lease renewals, leading to a surge in tenant retention rates and record-breaking occupancy levels.
5. Luxury Real Estate Boom: Dubai’s luxury real estate market experienced an unprecedented year, driven by an influx of millionaires globally. The UAE surpassed the United States and ranked second only to Australia in wealth migration. Palm Jebel Ali and Palm Jumeirah continued to attract high-net-worth individuals, showcasing the ongoing popularity of waterfront residences, with branded residences also in high demand.
6. Anticipated Growth in 2024: The anticipated increases in new property handovers in 2024 align with the continuous influx of expats to Dubai. While a slowdown in the rapid price increases observed since 2019 is expected, continued growth at more sustainable levels reflects the evolution and maturity of Dubai’s real estate market.
These milestones solidify Dubai’s position as a global real estate leader, attracting investors and residents alike. The city remains a beacon of stability and growth in an ever-changing global landscape.
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
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Villa prices saw particularly strong growth, with capital values increasing by 33.4 percent year-on-year
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Dubai’s real estate market showed strong performance in the second quarter of 2024, with notable increases across the residential, office, and retail sectors, according to a new ValuStrat real estate report for Q2 2024.
Villa prices experienced particularly strong growth, with capital values rising by 33.4 percent year-on-year.
Haider Tuaima, Director and Head of Real Estate Research at ValuStrat said: “The Dubai real estate market has shown impressive growth and resilience in recent months. The ValuStrat Price Index for Residential Capital Values increased by 6.4 percent quarterly and 28.2 percent annually, reaching 178.2 points.
“Despite severe flooding caused by record rainfalls in April, the quick and effective response from developers and authorities helped to control the damage, ensuring that market activity and property valuations remained robust in the subsequent months.”
The office sector also performed well, with the VPI for office capital values surging by 31.7 percent annually and 9.4 percent quarterly, reaching 212.5 points—the highest quarterly increase in a decade.
In the retail sector, Emaar Properties reported 98 percent occupancy in their prime mall assets, while overall mall occupancy stood at 96 percent during the first quarter of 2024. The hospitality sector also saw growth, with total international guests reaching 8.12 million as of May 2024, a 9.9 percent increase compared to the same period last year. Hotel occupancy reached 81 percent, rising by 1.4 percent year-on-year.
Despite these positive indicators, Tuaima added, “The decline in transaction volumes calls for a closer examination of market dynamics as stakeholders navigate this evolving landscape.”
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
Americans now think they need at least $1.25 million for retirement, a 20% increase from a year ago, according to a survey by Northwestern Mutual
