Property in Dubai: End-users on the rise

According to a report released on Thursday, in 2023, there was an increase in the percentage of buyers identifying as end users in Dubai’s real estate market, rising from 38% to 44%.

Betterhomes’ Dubai real estate market report for FY2023 reveals that the emirate saw a surge in residential sales transactions, totaling 120,742, marking a 38% increase from the previous record of 87,454 set in 2022. The report highlights that this growth was mainly driven by a significant increase in apartment sales, up by 49% to reach 94,155 transactions.

Meanwhile, the market for villas and townhouses experienced a slower growth rate of 9%, totaling 26,587 transactions. This sluggish growth was attributed largely to insufficient inventory in sought-after neighborhoods. Off-plan sales, which spiked by 48% annually in 2023, played a significant role in driving transaction growth, with off-plan sales accounting for the majority, increasing from 48% to 54% of all transactions. Apartment sales, constituting 87% of off-plan transactions, witnessed a remarkable 63% annual increase, serving as the primary driver for this surge.

The secondary market also saw a notable increase of 21% in transactions, with ready-to-move-in villas and townhouses witnessing a modest 3% increase, while apartment sales surged by 32%. Supply shortages and high purchase prices prompted many buyers to shift towards more accessible and reasonably priced apartments, thus fueling growth in the villa market.

In terms of total value, property sales in Dubai reached Dh322 billion in 2023, reflecting a 52% increase over the previous year, indicating substantial price growth outpacing transactional growth. Average prices in Dubai surged by approximately 18% overall in 2023, surpassing the previous market peak of September 2014 by more than 3%.

Higher interest rates recently served to temper demand and price escalations in the secondary market. However, the expectation of falling interest rates in 2024 could potentially make mortgages more affordable, thereby stimulating buyer demand and further driving up prices.

The luxury real estate market in Dubai continued its upward trajectory in 2023, witnessing an impressive 89% growth in transactions over Dh15 million, fueled by factors such as the city’s lifestyle, favorable tax environment, long-term visa policies, and comparatively affordable luxury real estate. It was anticipated that by 2023, around 4,500 millionaires would have settled in Dubai.

Despite a slight increase of 1.5% in home deliveries in 2023, totaling 34,810, this was insufficient to meet market demands, allowing prices to rise steadily throughout the year. Although developers announced plans for over 80,000 new homes in 2023, delivery is not expected until late 2025 or early 2026. The projected modest increase in supply for 2024 is unlikely to match the growing demand, especially considering Dubai’s rapidly expanding population, providing little relief to tenants.

Richard Waind, CEO of Betterhomes, views the movement towards end-user home ownership as a positive sign of market maturity, suggesting it may lead to greater price stability in the future. He anticipates continued growth at more sustainable levels in Dubai’s real estate market, aligning with the influx of expatriates and the expected increase in new property handovers in 2024.

Refer this for more

Leave a Reply

Your email address will not be published.

Related News

Dubai International Airport Welcomed 87 Mill...

April 24, 2024
Dubai International (DXB) finished 2023 with 87 million annual guests, exceeding both pre-pandemic and Dubai Airpor ...
Continue reading

Dubai Poised to Emerge as Premier Global Des...

April 24, 2024
A recent report suggests that Dubai and Sydney are anticipated to witness significant rises in prime residential pr ...
Continue reading

Dubai Welcomes Unprecedented 17 Million Inte...

April 24, 2024
Dubai experienced an exceptional year in tourism in 2023, with a remarkable influx of 17.15 million foreign visitor ...
Continue reading

Compare Listings