The first half of 2023 saw the purchase of approximately 57,000 homes in Dubai alone, putting the residential market on track to record its busiest year ever.
The number of residential sales climbed by 44 percent from the same period last year to 57,700 units transacted, according to Savills, a top global provider of real estate services. Included were 46,100 apartments and 11,600 villas.
In H1 2023, transaction activity levels are 209% higher than the five-year average for this period.
“Historically, the summer months in the UAE have been known to be slow as many residents travel during the school break. However, this trend seems to be changing in recent times as Dubai property continues to find favour among residents and international audiences looking for stability amid an uncertain economic environment,” said Swapnil Pillai, Associate Director of Middle East Research at Savills.
“Whilst it is still early to comment on the overall take-up during the usually slow summer period, early indicators suggest that market activity is likely to remain strong.”
Apartment units made up the majority of the 28,400 units absorbed in Q2 across the city, with a 33% increase rate over the same period last year.
Off-plan remains strong
Over 53% of the units sold during the first half of the year were off-plan, and buyer activity in this market segment surged dramatically during that time.
Savills claims that the rise in demand for off-plan purchases demonstrates that consumers are delaying committing to costly loan conditions due to the present economic climate. Additionally, it shows an increase in the number of new project launches, which went from 24,900 units in H1 2022 to 27,900 units in the corresponding period.
Property price growth steadies
Real estate values have continued to climb, but at a slightly slower rate.
The double-digit price growth that was observed in nearly all micro-markets last year has started to moderate in some locations with significant handovers and anticipated supply, claims Savills.
While this is happening, price growth is still slightly more steady in established neighborhoods with little new supply and lower vacancy rates.
Palm Jumeirah, one of Dubai’s most coveted residential neighborhoods, experienced one of the largest half-yearly price increases for apartments. Prices rose 19% on average compared to H2 2022.
Downtown Dubai and Dubai Marina, where unit values rose by 14 and 11%, respectively, were other markets with rapid growth rates.
Additional increasing localities included Al Furjan (9%), Sports City (8%) and Town Square (5%). Although prices in these areas have somewhat increased, future supply and high vacancy rates may limit growth.
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