According to a report by CBRE, the Dubai housing market has achieved a new peak in transactions in 2023.
Dubai’s residential real estate market has seen a significant surge in transactions during the first four months of 2023, recording its highest ever number of deals, according to a report by global real estate consultancy firm CBRE. The Dubai Residential Market Snapshot report revealed that a total of 36,946 transactions were logged from January to April 2023, marking a substantial 43.2% increase from the previous year.
The report also highlighted that April 2023 alone recorded a year-on-year increase of 16.2% in residential transactions, with off-plan market sales contributing to this surge, with an increase of 42.5%. In contrast, secondary market sales saw a drop of 2.4%.
According to CBRE, the rise in off-plan market sales is due to attractive incentives provided by property developers such as payment plans and reduced down payment requirements. The consultancy firm also pointed out that demand for larger properties with outdoor space has increased, as remote working has become the new norm, with many individuals and families preferring homes with extra room for workspaces and recreational areas.
The report further highlighted that Dubai’s residential market continues to offer competitive pricing when compared to other global cities such as London, Hong Kong, and New York, despite recording a rise in prices over the last year. However, it also emphasized that affordability remains an issue for many buyers, with a recent survey revealing that 56% of Dubai residents spend 40% or more of their monthly income on housing costs.
Experts predict that the residential market in Dubai will continue to grow in the coming months, with the market remaining attractive for both local and international investors. The UAE government’s initiatives such as the 10-year residency visa and Golden Visa scheme have helped boost foreign investment in the real estate sector, with the majority of foreign buyers coming from India, Pakistan, and the UK.
Furthermore, the recent Expo 2020 Dubai, which attracted millions of visitors from around the world, is also expected to have a positive impact on the residential real estate market. The event showcased Dubai’s world-class infrastructure and facilities, and experts believe that it will lead to an increase in demand for properties in the city.
Despite the overall positive trend, there were some areas of the market that saw a decline in activity. For example, the luxury segment of the market saw a decrease in transactions, with sales of properties worth over AED 10 million dropping by 14.8 percent year on year. However, this was offset by a 52.8 percent increase in sales of properties worth between AED 1 million and AED 5 million.
Experts predict that the trend towards off-plan sales is likely to continue in the coming months, as more developers launch new projects in response to the growing demand. In addition, the recent changes to the UAE’s visa laws, which allow retirees to obtain long-term residency visas, are expected to drive demand for residential properties in the country.
In response to the report’s findings, real estate developers have expressed optimism about the future of Dubai’s residential market, with many of them announcing new projects and initiatives. One of the city’s leading developers, Emaar Properties, recently launched a new payment plan for its projects, offering customers the option to pay just 5% of the total cost upfront and the remaining amount over an extended period of 6 years.
Another developer, Dubai Properties, announced the launch of its new “Rent to Own” scheme, allowing customers to rent properties for up to three years before deciding to purchase the property. The scheme aims to provide affordable housing solutions to those who cannot afford to purchase a property outright.
Overall, the report highlights the resilience of Dubai’s residential market, which has continued to perform well despite the global economic challenges brought about by the pandemic. The market’s ability to adapt to changing consumer needs, coupled with government initiatives and attractive incentives from developers, is expected to drive further growth in the coming months, making it an attractive investment opportunity for both domestic and international investors.
