Dubai real estate achieves unprecedented milestones in 2023 | Kanebridge News
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Dubai real estate achieves unprecedented milestones in 2023

New records set for volume and value of sales transactions.

By Press Release
Tue, Jan 30, 2024 2:55pmGrey Clock 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.



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UAE Residential Market Review Shows Strong Growth and Record Transactions in Q1 2024

The total transaction volume in Abu Dhabi for the first quarter of the year reached 2,795.

Thu, May 16, 2024 4 min

The CBRE Middle East, a global leader in commercial real estate services and investments, released its latest edition of the UAE Residential Market Review for the first quarter of 2024.

Abu Dhabi Market Overview

During the first quarter of the year, the total volume of transactions in Abu Dhabi stood at 2,795, registering a 22.6% increase compared to the year prior. This increase has been underpinned by an 18.1% rise in off-plan sales and a 34.5% rise in secondary market sales. In the year to Q1 2024, Abu Dhabi’s average apartment and villa prices increased by 4.3% and 2.3%, respectively.

Abu Dhabi’s rental market witnessed a total of 46,130 residential rental contracts in Q1 2024, registering a decline of 10.9% from the year prior. This has been due to a 15.5% decline in the number of renewed rental contracts registered and a 2.4% drop in new rental registrations over the same period. In the year to Q1 2024, average apartment and villa rents have increased by 4.5% and 1.1%, respectively. On the supply front, only 80 units have been delivered in Abu Dhabi in the first three months of the year, with all of this new stock being in Al Raha Beach. An additional 8,660 units are expected to be completed by year-end with 55.8% of this scheduled stock located in Yas Island, Al Sowwah, and Al Shamkha.

Dubai Market Insights

In Dubai, price growth has continued to accelerate during the first quarter of 2024, with average prices increasing by 20.7% in the year to March 2024. Throughout this period, average apartment and villa prices increased by 20.4% and 22.1%, respectively. Although headline average sales rates are still marginally below the 2014 highs by 0.1%, several prominent residential neighbourhoods have already surpassed their 2014 figures.

As of March 2024, average apartment prices stood at AED 1,486 per square foot, and average villa prices reached AED 1,776 per square foot. Average villa sales rates are currently above their 2014 baseline by 22.9%. Rental growth has also gained momentum in 2024, after a period of moderation in 2023. In March 2024, average residential rents registered a year-on-year increase of 21.2%, up from the 20.4% growth registered a month earlier. Over this period, average apartment and villa rental rates grew by 22.1% and 14.5%, respectively. Data from the Dubai Land Department revealed that, in the year to date to March 2024, the total number of rental registrations stood at 159,941, marking an increase of 5.8% from the previous year. As for supply, a total of 6,526 units were delivered in the first quarter of the year, with 59.7% of this supply being located in Meydan One, Jumeirah Village Circle, and Al Furjan. A further 46,086 are expected to be handed over the remainder of the year. However, given historic materialisation rates, the report expects that a limited portion of this upcoming stock will come online as planned.

Record-Breaking Transactions

March 2024 witnessed another record in Dubai’s residential market, with transaction volumes reaching the highest monthly figure on record, marking a year-on-year growth of 13.2%. Throughout this period, off-plan sales and secondary market sales increased by 20.2%, and secondary market sales increased by 2.2%.

In the first quarter of 2024, Dubai’s total transaction volumes reached 35,310. This is the highest total ever recorded in the first quarter of the year, marking an increase of 20.5% from the year prior. Over this period, off-plan transactions recorded an increase of 23.9%, and secondary market transactions rose by 15.2%.

However, in Q1 2024, the total number of sales transactions within the prime market segment registered a decline of 2.1% compared to the year prior. Throughout this period, super-prime transactions recorded a drop of 16.5% year-on-year to stand at a total of 227. These declines witnessed in both markets have been largely underpinned by significant declines in off-plan sales largely attributable to the high levels of demand for off-plan properties and the limited level of upcoming supply. In terms of performance, in the first quarter of 2024, average prime prices registered a year-on-year increase of 16.0%, standing at an average of AED 4,661 per square foot, and average super-prime prices grew by 14.8% over this period, reaching AED 4,978 per square foot.

Taimur Khan, CBRE’s Head of Research MENA in Dubai

Future Projections 

Looking ahead, CBRE expects Dubai’s residential sales market to maintain its upward trajectory. Prices in both the apartment and villa segments of the market will continue to grow, however, not at the same pace. On the rental front, we forecast that residential rents will continue to increase. That being said, the rate of growth will likely moderate.

Taimur Khan, CBRE’s Head of Research MENA in Dubai, comments: “The UAE’s residential market started the year on a relatively strong note, where the elevated demand levels continue to drive performance. The strong levels of activity and high absorption levels, which have reduced available supply, will continue to support price growth in both Abu Dhabi and Dubai over the remainder of the year. In terms of rental growth, we expect that rental rates in Abu Dhabi will continue to rise, with prime areas set to outperform the market. In Dubai, residential rents will continue to increase; however, not at the same rate that we have been seeing to date, and we expect that the rate of change will diminish in the second half of the year.”

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