Dubai’s residential property market witnessed a remarkable growth spurt in June 2023, surpassing last year’s figures by an impressive 18.8 percent. The total volume of deals reached a soaring 9,876 during this period. This surge was primarily driven by the exceptional growth in off-plan deals, which skyrocketed by a staggering 44.9 percent. While the secondary market experienced a minor decline of 0.5 percent, the overall performance of the market remained robust. The first two quarters of the year marked a record-breaking number of 57,737 residential transactions, reflecting the highest recorded figure to date.
Unprecedented Growth in Dubai’s Residential Market
According to Taimur Khan, CBRE’s Head of Research – MENA, the price growth in Dubai’s residential market has been consistently strengthening over the past few months. From January to June 2023, the average prices across the city witnessed a significant increase of 16.9 percent. Apartments and villas experienced rises of 17.2 percent and 15.1 percent, respectively. This impressive growth can be attributed to heightened activity levels, leading to the highest number of deals ever recorded midway through the year, reaching a staggering 57,737 transactions.
Khan further emphasized that nearly all of the communities monitored by CBRE have witnessed substantial price growth in both apartments (97.1 percent) and villas (96.8 percent) compared to the previous year. Prime and key residential areas are particularly enjoying elevated demand and significant price appreciation, driving the overall growth of the market.
Upward Trend in Average Prices
Dubai’s residential property market has shown a strong upward trend in average prices since late 2014. In the year leading up to June 2023, average prices increased by 16.9 percent, surpassing the 15.9 percent growth observed just a month earlier. During this period, average apartment prices surged by 17.2 percent, while average villa prices rose by 15.1 percent.
Although average apartment prices in Dubai remained below the 2014 levels, with an average of AED 1,294 per square foot, several communities have already surpassed their previous peak levels. On the other hand, average villa prices reached AED 1,525 per square foot, exceeding their 2014 figures by an impressive 5.5 percent.
Desirable Areas for Property Sales
When it comes to property sales, Downtown Dubai emerged as the most desirable area for apartments, with prices reaching an average of AED 2,440 per square foot. Palm Jumeirah, known for its luxurious villas, claimed the top spot for villa sales, with prices reaching an average of AED 4,845 per square foot. These areas attract buyers and investors due to their prime locations, upscale amenities, and iconic developments.
Rental Market Growth
The rental market in Dubai also experienced significant growth in the year leading up to June 2023. Average rents witnessed a substantial increase of 22.8 percent, although slightly lower than the previous month’s surge of 24.2 percent. During the same period, average apartment rents grew by 22.7 percent, while villa rents rose by 23.1 percent.
Presently, apartments in Dubai have an average annual rent of AED 104,685, while villas command an average annual rent of AED 14,552. Palm Jumeirah stands out as the location with the highest average annual apartment rent, reaching AED 58,335. On the other hand, Al Barari leads the villa segment, with an average annual rent of AED 1,042,931.
Future Trends and Anticipations
Looking ahead, Taimur Khan anticipates a softening trend in the rental market. Rental growth rates in major areas are expected to stabilize, which may result in reduced asking rents for many listings within these communities. However, given the overall positive performance of Dubai’s residential property market, it remains an attractive destination for real estate investors and homebuyers.