Meydan One, Downtown Dubai, and Business Bay together account for about 46.4% of all residential supply in Dubai this year. — KT File

Dubai’s residential rents rose 2.1% from the previous quarter and 27.2 percent from the same period in the previous year in the third quarter of 2023.

According to ValuStrat’s Q3 report, there was no change from the previous quarter despite a 38.7% annual increase in villa rentals.

An average of Dh312,000, Dh383,000, and Dh492,000 is paid for the rental of a three-bedroom villa, a four-bedroom villa, and a five-bedroom villa. Apartment asking prices rose by 19.1% YoY and 3.6% QoQ. The average yearly asking rent for studio apartments was Dh51,000, for one-bedroom apartments it was Dh75,000, for two-bedroom apartments it was Dh111,000, and for three-bedroom apartments Dh170,000. The anticipated residential occupancy rate in Dubai for the third quarter was 88.9%.

In the year ending in September 2023, average residential prices in Dubai increased by 19.6%, with average prices for apartments and villas rising by 19.7% and 18.9%, respectively, according to a report by the CBRE Group. “Although demand remains relatively elevated, we continue to see further moderation in the rental market. The rate of rental growth has softened throughout the year, where in the year to September 2023, average residential rents in Dubai increased by 20.6 percent, down from the 21.7 percent growth registered a month earlier.”

Estimates indicate that 27,095 residential units have been supplied so far this year, with 46.4% of the total supply coming from Meydan One, Downtown Dubai, and Business Bay. 34,651 more units are expected to be delivered for the remainder of the year, according to CBRE research.

However, according to data from real estate specialists Allsopp & Allsopp, rent in Dubai’s affluent residential neighborhoods dropped by an average of 21% in the third quarter of 2023. The study suggests that the rental market saw a spike in rental transactions during the summer of this year, according to Allsopp & Allsopp, who reported a 20% increase in rental transactions and a 29% increase in new rental client registrations from July to September.

The Dubai real estate market saw remarkable growth in the third quarter of 2023, according to data from the Dubai Land Department. 31,216 transactions were made in Q32023, up from 25,503 in the same period in 2022. This represents a 22% increase in transactions. This surge in transactional activity is reflected in the total value of these transactions, which reached Dh 97.55 billion in Q3 2022—a startling 40% increase from Dh 69.5 billion in Q3 2022.

According to Husni Al Bayari, chairman and founder of D&B Properties, the Q3 2023 real estate performance “encapsulates Dubai’s property market not just as enduring but as a dynamic force of innovation and adaptability. It’s not merely about numbers; it’s about Dubai’s remarkable ability to evolve and thrive in the face of changing global landscapes. The substantial surge in transactions and market worth is a living testament to the city’s unwavering charm among investors worldwide, showcasing Dubai as a resilient and forward-thinking real estate powerhouse.”

Office space in Dubai experienced annual capital gains of 25.5% during the third quarter. According to the ValuStrat report, the VPI increased by 7.3 percent on a quarterly basis to reach 103 points, up from a base of 100 points in Q1 2015. ‘The weighted average price for an office in Dubai was Dh14,230 per sq m. Continued double-digit annual growth was seen in five major central business districts in Dubai: Jumeirah Lake Towers (37.2 percent), DIFC (33.7 percent), Business Bay (22.2 percent), Downtown Dubai (16.8 percent), and Barsha Heights (14.8 percent). Shell and core Grade A office space saw valuations expand 33.3 percent YoY, while the same classified Grade B grew 19.2 percent YoY.’

Office transitions saw a 9.0% YoY increase in Q3 2023, but a 4.7% QoQ decline with 631 transactions. The median transacted price increased by 9.1% on a quarterly basis and by 28.4% on an annual basis, to Dh11,140 per sq m (ADh1,035 per sq ft).