Real estate in Dubai has increased by double digits in recent years
Dubai’s real estate market has shown remarkable resilience, defying challenges like rising interest rates and inflation. According to Property Monitor, the market experienced two years of rapid growth, resulting in a double-digit price increase of 11.05% in 2022. Although the monthly growth rate decreased from the previous year, the overall performance remained strong.
In December, home prices saw a significant 1.17% increase, reaching Dh1,089 per square foot, a level last observed in January 2018. Despite a 10.4% reduction in overall sales transactions, December recorded the highest number of sales ever and surpassed expectations.
The residential segment stood out with a record-breaking 86,849 sales in 2022, surpassing the previous high of 80,831 sales in 2009. Dubai’s unique position as a global real estate oasis attracts interest from around the world, with various factors like the Arab Spring, Covid-19, and geopolitical events contributing to the market’s growth.
ValuStrat predicts a 7% to 10% citywide price increase for villas and apartments in 2023 due to the high demand for quality properties. The relaxation of Covid-19 restrictions in China is expected to boost visitor foot traffic, benefiting Dubai’s tourism industry. The upcoming COP28 and the UAE Tourism Strategy 2031 are also set to stimulate investment across related sectors.
Dubai’s real estate market closed 2022 on a strong note, with sales reaching Dh265 billion, a 76% increase compared to the previous year. Off-plan sales experienced a surge of 100%, totaling over 52,000 transactions valued at more than Dh124 billion. Developers displayed confidence by releasing a record 53,000 units, leading to increased gross rental yields, particularly for flats at slightly over 7%.
While Property Monitor expects the market’s pace to moderate in the coming year, with unlikely prospects of maintaining the record-breaking performance, it remains a promising sector with potential for over 110,000 transactions in the future. The Dubai real estate market continues to attract investors and high-net-worth individuals, ensuring its ongoing growth and stability.