Residential Market in Dubai on a High

The real estate prices continue to rise, as per a report

The average price for residential units in Dubai grew by 16.9 per cent on an annual basis, up from 15.9 per cent year-on-year from the data recorded in May this year, as per a report by consultancy CBRE. Average apartment prices in June surged by more than 17 per cent to Dh1,294 ($352.6) per square foot while villa prices climbed by 15 per cent to Dh1,525 per square foot. Although, the average apartment sales rates remain about 13 per cent below the 2014 levels, “several communities have already surpassed their peak”, the CBRE report said. “On the other hand, average villa sales rates currently sit 5.5 per cent above their [comparative] 2014 figures.”

In June, the volume of transactions in the emirate, the commercial and trading hub of the Middle East, rose to 9,876, an almost 19 per cent annual increase. Off-plan transactions grew by almost 45 per cent, but the secondary market transactions soften marginally in June, according to the data. In the first six months of the year, the emirate recorded a total of 57,737 residential property deals, the highest-ever figure.

“A strengthening of price growth has been witnessed in Dubai’s residential market over the past few months … [and] this stronger rate of growth has been supported by the elevated activity levels,” Taimur Khan, head of Mena research at CBRE, said. “Midway through the year, the total transaction volumes hit the highest level on record over.”

Dubai's economy grew by 4.6 per cent on an annual basis in the first nine months of 2022, driven by wholesale and retail trade accounting, according to data from the emirate's statistics centre. The emirate's economy is estimated to have grown 5 per cent last year and is forecast to increase by 3.5 per cent in 2023, according to Emirates NBD.

Dubai's property market has bounced back strongly from the coronavirus-induced slowdown, helped by government initiatives such as residency permits for retirees and remote workers.

The Emirates’ move to expand the 10-year golden visa programmeme, the economic gains generated by Expo 2020 Dubai and higher oil prices also supported property market growth momentum. Of all the local amenity options offered in Dubai, parks (85 per cent) were an overwhelming favourite among high-net-worth individuals. 

Dubai is also the world's top market for $10-million homes as sales hit $3.1 billion in the first half of the year, edging past Hong Kong and New York, according to global property consultancy Knight Frank. In the first six months, it achieved 79 per cent of the total number of $10 million homes sold in 2022, according to the consultancy. Downtown Dubai registered the highest sales rate per square foot in the apartment segment of the market, reaching Dh2,440, while Palm Jumeirah registered the highest per square foot in the villa segment at Dh4,845. In the rental market, average rents increased by 22.8 per cent in the year to June 2023, down from the 24.2 per cent increase recorded a month earlier.

In June 2023, the average annual apartment and villa rents stood at Dh104,685 and Dh314,552, respectively. “We continue to experience softening in the rental market – a trend we expect to be maintained over the upcoming period, particularly since rental growth rates in several major areas are moderating, and many listings within these communities are reducing their asking rents,” Khan said.