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Sales prices shot up 18% y-o-y in Dubai’s residential market in 2023, while rental prices rose 26% y-o-y, according to Deloitte’s latest Dubai market overview (pdf). Dubai’s real estate market “sustained an upward trajectory” compared to pre-pandemic levels, with transactions at record-high levels in 2023, the report said.
ICYMI: Market analysis from Savills noted that property transactions in Dubai stretched past the 100k mark for the first time at 118.2k units in 2023 (up 29% y-o-y).
Sales prices for villas outpaced prices for apartments, the report noted, adding that properties in Palm Jumeirah apartments, Dubai South, and MBR City recorded the largest jumps in the past year. Meanwhile, DIFC, Jumeirah, and Dubailand Residences saw the highest increases in rental prices, at a range of 36-39% y-o-y.
The report expects prices to somewhat stabilize in 2024 on the back of new developments, which rose 90% y-o-y in 2023.
Recovering hospitality market: Dubai recorded a 6% y-o-y increase in occupancy rates in 2023, driven by government initiatives to boost its tourism sector. The emirate’s total number of visitors surpassed pre-pandemic levels, with 17.5 mn tourists visiting in 2023. Average occupancy rates also hovered at 77%, marking a 6% y-o-y increase.
The office market is also on the up and up: Office rents in Dubai surpassed pre-pandemic levels by 20% in 2023, growing 17% y-o-y, the report adds. Grade A office spaces in ICD Brookfield and DIFC recorded occupancy rates of up to 95% during the year, while Dubai’s industry sector also recorded high occupancy levels. Savills’ analysis had attributed growth to new market entries from the Americas, Russia, and India, and expansion of Dubai’s non-oil sector.
Deloitte predicts the sector will continue to grow as the government invests some AED 246.6 bn until 2026 in economic growth and development, with a focus on infrastructure — which will maintain hiring levels and office demand.
IN OTHER DUBAI REAL ESTATE NEWS-
Dubai’s luxury segment ranked second globally in terms of price increases in 2023, recording a 15.9% y-o-y increase, Knight Frank says in its latest Wealth Report, according to a press release. The emirate saw a record 431 units valued at over USD 10 mn handed off in 2023, owing to its ability to appeal to the international elite as “one of the most affordable luxury markets in the world,” the report adds.
The total number of prime homes available for sale dropped 38.5% y-o-y in 2023,indicating foreign buyers are switching over to longer-term residency mindsets.
Prime residential values are projected to grow 5% in 2024, after having climbed 16% in 2023 and 44.4% in 2022.
