In Q3 2023, the Dubai real estate market experienced its highest quarterly capital gains in ten years, according to a recent study by ValuStrat.

The housing sector of the Dubai real estate market is gauged by the Villa Price Index (VPI), which rose by 6.1 percent from the previous quarter to 96.6 points on the ValuStrat Price Index. This showed a 15.1% increase from the same period last year.

Dubai villa and apartment valuations rise in Q3 2023

The prices of villas rose by 7.6 percent QoQ and 19.8 percent YoY to 123.6 VPI points, which is 2.6 percent more than the 2014 high prices.

This quarter, Palm Jumeirah (9.5 percent), Jumeirah Islands (9.5 percent), Dubai Hills Estate (9.3 percent), and Mudon (9 percent) were the top-performing properties.

The VPI for apartments increased by 4.8 percent from quarter to quarter (QoQ) to 79.7 points. Despite the 11% YoY growth mentioned, this is still 29.2% below 2014 levels.

The best quarterly achievers in this category were Discovery Gardens (7.5 percent), Palm Jumeirah (6.7 percent), The Greens (7.3 percent), and Dubailand Residence Complex (6.6 percent).

For both villas and apartments, prime property valuations climbed by 16.5 percent year over year and 6.6 percent quarter over quarter, respectively, to reach 106.2 points.

Prime villas, however, had capital gains of 20.2 percent annually and reached a record 10-year high of 135.7 points.

Despite not performing as well as their villa counterparts, prime-located flats, according to the report, saw yearly advances of 13.6 percent and 5.2 percent, respectively, compared to the previous quarter, achieving 90.1 index points.

New construction seen in Dubai during Q3 2023

In the real estate sector, there was a substantial quantity of new building, the research showed.

Based on developer completion schedules, 53,715 newly constructed units were estimated to be released into the market in 2023.

As of the first nine months of this year, 21,507 apartments and 2,068 villas have been completed, which is equivalent to 44% of the original estimates for the entire year.

Off-plan property market in Dubai

The sector of off-plan houses saw an increase in average purchase size of 13% year over year, reaching AED 2.5 million.

The average transacted price for off-plan properties in the city was AED 20,035 per square meter, or AED 1,861 per square foot.

The value of off-plan contract registrations (Oqood) climbed by AED 36.9 billion, or 2.5% QoQ and 19.1% YoY.

The most off-plan residences were traded in the third quarter, shattering monthly records set by Dubailand Residential Complex, Business Bay, and Mudon separately.

Move-in ready apartments sees over 11,000 transactions in Q3 2023

The ready (secondary) home sales segment saw 11,308 transactions in the third quarter, representing a YoY increase of 17.7 percent.

The average purchase price of ready-to-move-in residences was AED2.3 million, a YoY decrease of 1.4 percent, while being down 5% from the previous quarter.

Remarkably, less than AED one million was the asking price for 41.5% of all ready-to-move-in sales, which primarily comprised apartments. In the same time frame, 52 residential transactions of over AED 30 million were recorded.

Office space sector

The market for office space in Dubai has grown remarkably, with annual capital gains of 25.5%.

The ValuStrat Price Index rose by 7.3 percent on a quarterly basis to reach 103 points from a base of 100 points in Q1 2015.

The weighted average cost of an office in Dubai was AED 1,322 per square foot, or 14,230 per square meter.

Several Dubai CBDs, including Downtown Dubai, Barsha Heights, DIFC, Business Bay, and Jumeirah Lake Towers, reported double-digit annual growth.

A total of 12,680 square meters (136,500 square feet) of office space were scheduled for completion in 2024, while 25,2783 square meters (2.7 million square feet) were anticipated to be finished by 2023.