Strong Growth and Buyer Preferences Shape Dubai’s Real Estate Market
A record number of real estate transactions was recorded in the United Arab Emirates last year. The market is particularly thriving in Dubai, where prices are expected to continue rising. We gather insights from industry experts to provide an overview of the situation.
The real estate market in the United Arab Emirates, including Dubai, witnessed a remarkable surge in transactions in 2022. According to experts, this trend is anticipated to persist throughout 2023.
Over 97,000 real estate transactions were recorded in Dubai last year, with a total value of 67.38 billion euros. Despite the global economic outlook, affluent individuals have continued to settle in the emirate over the past 18 months, which has notably fueled the luxury segment.
“Between 2021 and 2022, the sales volume increased by 76%, and we believe this trend will continue in 2023. Of course, we won’t see the same price increase as last year, but we expect the sales volume to remain exactly at the same level as today,” says Simon Baker, CEO of haus & haus Group. He believes that the city ticks many boxes. “People come to Dubai because it is safe, clean, offers excellent medical care, and has outstanding schools..” he emphasizes.
A continuously growing real estate market in Dubai
Cavendish Maxwell, which compiles real estate data in the region, attributes this result to a post-pandemic recovery. “In terms of transactions, it’s probably the second-best year we’ve ever had,” says Zhann Jochinke, Director of Market Intelligence & Research at the agency. “The market hit its lowest point in late November 2020 due to the pandemic, and the markets had to rebound. That’s what explains this recovery, particularly in property resales, villas, and houses. Then, over the past twelve months, there has been a renewed interest in off-plan purchases,” he explains.
Industry experts agree that several factors explain why the city outperforms other markets worldwide. “We have seen a significant increase in buyers from Europe, the United Kingdom, France, Switzerland, and Germany. In these countries, taxes are very high, and there are huge inflation problems,” remarks Simon Baker.
Zhann Jochinke adds, “The major global markets – Europe, Hong Kong, Australia, the United States – are more influenced by their local context, interest rates, and employment situation.” According to him, Dubai and the UAE have a unique positioning. “There is a significant expatriate workforce, numerous government initiatives to attract new residents and stimulate the real estate market, and there is no other place where so many new housing units are being built,” he describes.
As the demand for properties increases, Dubai is expanding. In 2023, it will be the property buyers who will contribute to giving the city a new face.
The emirate real estate transactions
In May, the emirate experienced a remarkable surge in its real estate market, with a year-on-year increase of 78 percent in the volume of transactions. A total of 11,700 deals were recorded, compared to 6,587 in May 2022.
The growth of Dubai’s real estate market in May was significantly supported by off-plan deals, which accounted for 49 percent of the total sales transaction volume and 43 percent of the overall value, as per Property Finder data.
The volume of off-plan property sales witnessed a remarkable surge, surpassing 5,700 transactions, marking a 110 percent increase compared to the previous year’s 2,716 deals.
This surge in volume was also reflected in the value of off-plan properties, which experienced a staggering rise of almost 136 percent to exceed Dh14.5 billion, surpassing the Dh6.15 billion recorded in April 2022.
Dubai’s economy demonstrated resilience, expanding by 4.6 percent in the first nine months of 2022, according to data from the emirate’s statistics center. Emirates NBD estimates the full-year growth for Dubai in 2022 to reach 5 percent, with a projected expansion of 3.5 percent this year.
