Dubai real estate market is lucrative and promises impressive returns, far more than several other established property markets. And since the beginning of 2022, the escalating numbers of real estate transactions indicate its post-pandemic stellar recovery. The property prices also continued increasing simultaneously helping the sector regain its glory after the temporary halt. With construction cranes dotting the city skyline, new property developments being announced and new neighbourhoods on the cards, we can comprehend that Dubai real estate market is booming.
Currently, Dubai real estate market is at a high point with no signs of slowing down. According to the Dubai Land Department (DLD) report, over 43,000 property transactions were recorded in the first half of 2022, worth more than $31.3 billion.
The rebound of commercial properties in Dubai real estate
June 2022 proved to be the highest grossing month for Dubai real estate sector in the last 13 years. And not just the residential sector but commercial properties also showed incredible growth both in terms of demand and price. Backed by a conducive work environment, flourishing economy and supportive legal framework, the commercial real estate sector basked in the limelight of attention from international investors. Resultantly, besides prices and demand for commercial properties rent for offices in Dubai spiked higher than UK and USA.
The record-breaking week in October
Dubai real estate market is poised to register another record-breaking week, with a total of 2,703 property transactions conducted during the 3rd week of October 2022 – ending on the 21st. These numbers show real estate investors’ enthusiasm and property agents in Dubai are of the view that the level of activity seen in the market can outperform several other international real estate markets. Insatiable demand from international investors has also fuelled property price rises across almost all prime areas in Dubai.
According to the data released by the Dubai Land Department (DLD), the worth of 2,073 real estate transactions (that were conducted during the previous week) was around AED8 billion. Upon further inspection, we get to know that 147 plots were sold for AED1.12 billion, and the value of 2,023 residential apartments and villas was estimated at around AED4.79 billion.
Top real estate transactions
The top real estate transactions include a piece of land sold for AED85 million in Al Thanayah and another one sold for AED63 million in Island 2.
Luxury properties of Dubai Real Estate – The most attractive real estate investment niche
Another notable trend witnessed in Dubai real estate sector is potential investors’ growing interest in luxury and ultra-luxury properties. The demand has led to an incredible increase in luxury property prices, across all prime areas. Dubai prime areas are in higher demand with property prices up by 90%, while a few ultra-luxury properties are priced at AED300 million or even more.
Several new luxury properties are announced recently to cater to the demand of high-net-worth individuals. For instance, Alpago Properties announced the construction of six luxury villas on the “Billionaire Row” of The Palm, with prices set from AED120 to AED300 million.
Dubai’s luxury districts in higher demand
The demand for luxury properties for sale in Dubai has tremendously increased over the past 12 months and so are the prices. A few areas that remained in the highest demand in the record-breaking week of October include Jabal Ali First, where 48 real estate transactions took place worth around AED151.59 million, followed by 18 property transactions worth AED421.33 million in Mohammed bin Rashid City and Al Yufrah 2 with 11 real estate deals worth AED13 million.
When it comes to apartments and villas transfers, the top three include the one sold for AED955 million in Palm Jumeirah, another sold for AED671 million in Marsa Dubai, followed by one sold in Business Bay worth AED537 million.
The total amount of mortgaged properties for the last week was AED1.72 billion, with the highest being a piece of land purchased in Palm Jumeirah, mortgaged for AED416 million. At the same time, 107 properties were granted between first-degree relatives worth AED387 million.
Increasing demand for Dubai real estate
The demand for Dubai real estate is booming, while the value of properties continues to strengthen. Dubai real estate market continues to be investors’ favourite and the top investment choice, despite global headwinds. With record-breaking weeks and months, the real estate market proves to be on the right growth track, a trend that will continue in 2023 as well.
According to Mohamad Kaswani, managing director of Mortgage Finder, “We took note of current trends redefining the immediate future of the real estate market, and as interest rates continue to rise, we’re seeing a rush of mortgage borrowers opting into our fixed-rate products hoping to stabilise their housing costs. Conversely, first-time homebuyers are actively considering a house purchase to provide more stability to their families due to high rental prices that have skyrocketed throughout the city.”
“Additionally, as demand for residential properties continues to rise, many tenants find themselves pressured to purchase the properties they are residing in to alleviate the stress resulting from landlords demanding higher rental prices. The dual impact of home price appreciation along with interest rate hikes translates into a monthly mortgage payment up to 50 per cent higher than the same period last year, majority of which is caused by the appreciation of home price,” he said further.
Conclusion
With positive growth and increased demand, Dubai real estate sector will continue to experience a moderate yet upward growth momentum in 2023. Limited supply for luxury and ultra-luxury properties will further lead to an increase in prices and demand while the apartment segment will become more stable in terms of price, demand and rental yield.
A majority of property brokers in Dubai agree that new visa policies, buyers’ protection laws, and new supply will be the key factors to drive the growth upwards.
If you are planning to buy an apartment or villa in one of the above-mentioned areas or anywhere in Dubai, feel free to call the team HFRE at +971 4876 2473 or write us an email at info@hfre.ae. We assure you that one of our team members will get back to you with the best available options that can align with your investment goals and also fit into your budget.