According to a survey conducted by leading global real estate service providers, the first half of 2023 witnessed a significant surge in Dubai’s residential real estate market. With a staggering total of 57,700 property transactions, including both apartments and villas, this year is shaping up to be the most active period yet. This impressive figure marks a remarkable 44 percent increase compared to previous records. The survey, conducted by Savills, unveiled that a total of 46,100 apartments and 11,600 villas were sold in this dynamic real estate landscape during the first half of the year. These numbers set a new benchmark, showcasing the highest volume of transactions for a six-month period. In contrast to the five-year average, this represents a remarkable surge of 209 percent in activity levels within the current timeframe.
Interestingly, the buoyancy in Dubai’s real estate sector extends beyond just residential properties, encompassing commercial properties as well. The Dubai Lands Department reported an unprecedented semi-annual sales record in the first half of 2023, with an impressive 60,440 transactions amounting to Dh177.3 billion.
Swapnil Pillai, the associate director of Middle East Research at Savills, highlighted a departure from the historical trend of a summer slowdown in the UAE. He attributed this shift to Dubai’s property market’s consistent allure to both local residents and international investors who are seeking stability in an uncertain economic environment. Early indications suggest a sustained market vitality, defying the usual summer slowdown. Notably, the second quarter saw the absorption of 28,400 units, marking a significant 33 percent annual growth, predominantly driven by apartment transactions.
Savills’ research also underscores the robustness of the off-plan segment, which accounted for almost 53 percent of the total units sold. This inclination toward off-plan transactions reflects buyers’ cautious approach in the face of higher lending rates in the prevailing economic landscape. Pillai further highlighted an uptick in the launch of new projects, totaling 27,900 units in the first half of 2023, compared to 24,900 units for the entire year of 2022.
JLL’s Q2 Market Overview report revealed a substantial year-on-year increase of 38 percent in value and 30 percent in volume for off-plan residential sales in Dubai. Meanwhile, in Abu Dhabi, the value of off-plan transactions more than doubled from Dh1.8 billion to Dh3.8 billion. In Dubai, the majority (57 percent) of these transactions fell within the Dh500,000 to Dh2.0 million range, with a primary focus on studios and 1BR units in areas such as Jumeirah Village Circle (JVC), Dubailand, and Mohammed Bin Rashid (MBR) City.
A survey by Kamco Invest further underscored the strength of Dubai’s real estate sector, contributing to a 9.9 percent surge in property sale transaction value across the GCC to $90.7 billion year-on-year in the first half of 2023. Dubai’s property transactions accounted for 54 percent of the region’s total transacted value, effectively offsetting declines observed in other key markets like Saudi Arabia, Qatar, and Kuwait.
Savills’ report highlighted a notable trend in the preference for villa and townhouse developments for ready units, whereas the majority of off-plan transactions were observed in the apartment category. Notably, 67 percent of villa and townhouse transactions during the first half of the year were for ready units. In-demand locations for ready villa units included Damac Hills 2, Al Furjan, and Dubai Hills Estate.
The report from Savills also pointed out that while asset prices continue to ascend, the pace of growth has slightly moderated. Areas with significant handovers and planned supply are experiencing a deceleration in the double-digit price growth that characterized much of 2022. Nonetheless, well-established locations with limited upcoming supply and lower vacancy rates have managed to maintain relatively stable price growth.
In conclusion, Dubai’s residential real estate sector in the ongoing year has showcased an exceptional performance, setting new records in property transactions and reflecting the enduring appeal of Dubai’s property market to both local and global investors. This trend signifies a promising outlook for the remainder of the year and underlines Dubai’s position as a thriving hub for real estate investment.