Real Estate Market Situation in Dubai 2023-2024
18 July 2023 • 8 min read
Some Valuable Statistics for Q2 2023
Residential values in Dubai increased by 4.8% in Q2 2023, marking the tenth consecutive quarter of price increases. The most recent increase left values 24% higher than in Q1 2020, but average prices remain 11% lower than in 2014. Prices have risen by 17% year over year.
Apartment prices climbed by 4.8% to little more than AED 1,290 psf in Q2, with values currently 21% higher than in Q1 2020. Despite a 17% increase in the last year, apartments still trail the 2014 record by 14%. Furthermore, villa prices grew by 4.8% between March and June to an average of AED 1,520 psf, a 15% increase over previous summer and 51% higher than January 2020 levels.
This expansion is being fueled in large part by the international elite's continued strong demand for luxury second homes. Unsurprisingly, this rate of rise has resulted in villa prices exceeding the previous market peak in 2014 by about 5%. This statistic is significantly higher in high-demand neighborhoods, as we will see later.
While price rise has clearly been fastest in the city's most costly submarkets during the previous three and a half years, more affordable places, at least on a price per square foot basis, have also seen a surge in values.
Demand for homes in inland towns, which are more inexpensive than coastal developments, has seen some of the sharpest increases in the last year, fueled by domestic purchasers. Apartment prices in Dubai Hills Estate, for example, have risen by over 27% in the last year to around AED 1,940 per square foot.
Similarly, villa prices in Jumeirah Islands have risen by 56% in the last year to AED 2,510 psf, making it the neighborhood with the fastest rising villa values.
Apartment prices climbed by 4.8% to little more than AED 1,290 psf in Q2, with values currently 21% higher than in Q1 2020. Despite a 17% increase in the last year, apartments still trail the 2014 record by 14%. Furthermore, villa prices grew by 4.8% between March and June to an average of AED 1,520 psf, a 15% increase over previous summer and 51% higher than January 2020 levels.
This expansion is being fueled in large part by the international elite's continued strong demand for luxury second homes. Unsurprisingly, this rate of rise has resulted in villa prices exceeding the previous market peak in 2014 by about 5%. This statistic is significantly higher in high-demand neighborhoods, as we will see later.
While price rise has clearly been fastest in the city's most costly submarkets during the previous three and a half years, more affordable places, at least on a price per square foot basis, have also seen a surge in values.
Demand for homes in inland towns, which are more inexpensive than coastal developments, has seen some of the sharpest increases in the last year, fueled by domestic purchasers. Apartment prices in Dubai Hills Estate, for example, have risen by over 27% in the last year to around AED 1,940 per square foot.
Similarly, villa prices in Jumeirah Islands have risen by 56% in the last year to AED 2,510 psf, making it the neighborhood with the fastest rising villa values.
Prices for Villas vs. Benefits for Buyers
Dubai's real estate market is known for its diversity and richness, providing a plethora of options for villa buying. The price of a villa in Dubai varies according to its characteristics and location, making it affordable to a wide range of purchasers. Here, we provide a variety of villa options from several districts, highlighting the price ranges and unique features they provide:
Starting at $1.9 million: Prospective purchasers might locate villas within a new residential development in the Dubai South neighborhood near Golf Links Villas. These five-bedroom villas begin at 640 square meters. They have fully equipped kitchens, maid's quarters, wide yards, private pools, and access to public amenities such as gyms and picnic spots.
Starting at $1.3 million: Al Furjan, which translates to "a collection of homes" or "a small village" in Arabic, has 819 residences starting at $1.3 million. There are a range of villa options available here, with half of them incorporating gardens and terraces and the other half standing as independent residences with three, five, or six bedrooms. Al Furjan has a welcoming ambience, with villas arranged in tiny clusters and linked by walkways and beautiful foliage. The district also has around 30 parks and pedestrian routes, which account for a fourth of the total master plan.
Over $5.9 million: Dubai Hills provides exquisite five-bedroom homes starting at $5.9 million, with the option of installing elevators for enhanced convenience. This gated community has a basketball court, a gym, a picnic area, a pond, a pool, a playground, and a yoga zone.
Over $13.8 million: Palm Jumeirah, the distinctive man-made atoll fashioned like a palm tree, is home to a fantastic assortment of beachfront houses and villas along its center section known as "The Trunk." This opulent island is home to a plethora of residential buildings, stores, hotels, boat marinas, spa salons, and the famous monorail. Villas on Palm Jumeirah are in high demand from both tourists and expats, making it a popular alternative for anyone looking for a summer hideaway or permanent residence.
Starting at $1.9 million: Prospective purchasers might locate villas within a new residential development in the Dubai South neighborhood near Golf Links Villas. These five-bedroom villas begin at 640 square meters. They have fully equipped kitchens, maid's quarters, wide yards, private pools, and access to public amenities such as gyms and picnic spots.
Starting at $1.3 million: Al Furjan, which translates to "a collection of homes" or "a small village" in Arabic, has 819 residences starting at $1.3 million. There are a range of villa options available here, with half of them incorporating gardens and terraces and the other half standing as independent residences with three, five, or six bedrooms. Al Furjan has a welcoming ambience, with villas arranged in tiny clusters and linked by walkways and beautiful foliage. The district also has around 30 parks and pedestrian routes, which account for a fourth of the total master plan.
Over $5.9 million: Dubai Hills provides exquisite five-bedroom homes starting at $5.9 million, with the option of installing elevators for enhanced convenience. This gated community has a basketball court, a gym, a picnic area, a pond, a pool, a playground, and a yoga zone.
Over $13.8 million: Palm Jumeirah, the distinctive man-made atoll fashioned like a palm tree, is home to a fantastic assortment of beachfront houses and villas along its center section known as "The Trunk." This opulent island is home to a plethora of residential buildings, stores, hotels, boat marinas, spa salons, and the famous monorail. Villas on Palm Jumeirah are in high demand from both tourists and expats, making it a popular alternative for anyone looking for a summer hideaway or permanent residence.
From a financial standpoint, villa ownership in Dubai has various advantages:
- Passive Income Potential: Villas in selected neighborhoods can generate yearly rental returns of up to 6.5%, giving investors with a continuous source of passive income.
- Capital Appreciation opportunity: The Dubai real estate market has a history of property value appreciation, providing the opportunity for capital gains on your investment.
- No Income Tax: Because Dubai has no income tax, it is an appealing destination for investors and property owners.
- Full Ownership Rights: Buyers in freehold regions have full ownership rights, which adds security to their investment.
- Residency Visa: Purchases of property starting at 750,000 AED (about $204,100 USD) qualify for a 3-year residency visa, making it an appealing choice for those wishing to live in Dubai.
Prime prices increase by 11.6%
Dubai's prime marketplaces continue to be popular, accounting for 13% of all transactions in the first half of the year. The Palm Jumeirah, Emirates Hills, and Jumeirah Bay Island are among them. In the top class, the average transaction price is roughly AED 3,560 per square meter. Dubai's luxury home market remains inexpensive, enticing overseas purchasers. Chinese nationals are the most numerous foreign buyers, followed by Emiratis and Britons. Demand for quality residential real estate was so strong last year that prices climbed 44%, the most in the world. The yearly growth rate was 48.8%, including the 11.6% price increase in Q2. The consistent price growth is projected to continue due to the limited supply of new houses and the ongoing flood of purchasers in Dubai's real estate market.
Ultra-prime demand is strong
The luxury housing market in Dubai is experiencing consistent demand from wealthy purchasers investing in second homes in the city. Homes priced above US$10 million were sold for a total value of US$3.3 billion in the first half of 2023. With this rate of sales, a new high will be set this year. The average transaction price is roughly US$1,800 per square meter, which is relatively low.
However, the average transaction price in this segment of the market has increased by 7% over the previous year. In terms of transaction volume, Dubai was the most active real estate market above US$10 million in the first quarter of 2023, ahead of Hong Kong and New York. Demand is primarily centered in the city's affluent districts, such as The Palm Jumeirah, Emirates Hills, and Jumeirah Bay Island. Other districts likely to be popular in the near future include Jumeirah Golf Estates, Al Barari, Tilal Al Ghaf, and Jumeirah Islands.
However, the average transaction price in this segment of the market has increased by 7% over the previous year. In terms of transaction volume, Dubai was the most active real estate market above US$10 million in the first quarter of 2023, ahead of Hong Kong and New York. Demand is primarily centered in the city's affluent districts, such as The Palm Jumeirah, Emirates Hills, and Jumeirah Bay Island. Other districts likely to be popular in the near future include Jumeirah Golf Estates, Al Barari, Tilal Al Ghaf, and Jumeirah Islands.
Off-plan sales are increasing
Real users, including second home buyers, have become the primary buyers in the third cycle of Dubai's free housing market. Speculative activity used to dominate the market, but the share of 'off-plan' purchases is now about 42-44%, which is in line with the 10-year norm. According to the 'Destination Dubai 2023' research, 53% of High-Net-Worth Individuals (HNWI) buyers want to buy 'newly built/completed' properties in Dubai, especially if they have more than US$10 million in cash or are from East Asia. Only 10% of total global HNWI real estate demand is accounted for by "off-plan" deals.
"Off-plan" sales have increased in the last 12-18 months as a result of an increase in new project launches in response to consistent housing demand. In fact, "off-plan" dwelling sales outpaced completed housing sales in the first half of the year.
"Off-plan" sales have increased in the last 12-18 months as a result of an increase in new project launches in response to consistent housing demand. In fact, "off-plan" dwelling sales outpaced completed housing sales in the first half of the year.
Real Estate Market Insights for 2024
Dubai's real estate industry remains one of the world's most promising investment marketplaces. The figures for 2023 and the Dubai real estate price prediction for 2024 support this opinion.
We have exciting news for anyone interested in the Dubai real estate market. According to the most recent Arabian Business projections, Dubai's real estate sector will become a global growth center in 2024, with a 15% growth rate.
This forecast is based on Dubai's consistent economic growth and its desire to attract real estate investment. Dubai has established itself as a significant center for attracting visitors, business travelers, and worldwide events in recent years, and its popularity continues to rise.
The real estate market in Dubai offers incredible potential for investors and purchasers, with various infrastructural projects, including the EXPO 2020 World Expo, innovative technology developments, and a stable economic environment.
So, if you're thinking about investing in real estate or purchasing a home in Dubai, 2024 is a promising year to do so.
We have exciting news for anyone interested in the Dubai real estate market. According to the most recent Arabian Business projections, Dubai's real estate sector will become a global growth center in 2024, with a 15% growth rate.
This forecast is based on Dubai's consistent economic growth and its desire to attract real estate investment. Dubai has established itself as a significant center for attracting visitors, business travelers, and worldwide events in recent years, and its popularity continues to rise.
The real estate market in Dubai offers incredible potential for investors and purchasers, with various infrastructural projects, including the EXPO 2020 World Expo, innovative technology developments, and a stable economic environment.
So, if you're thinking about investing in real estate or purchasing a home in Dubai, 2024 is a promising year to do so.
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