Market Trends of UAE Condominiums and Apartments Industry
Luxury Apartment Prices Set to Witness a Steep Growth
Dubai's prime residential prices are set to see the strongest growth globally in 2023. The prices are set to rise 13.5% in 2023 as more foreign buyers and high-net-worth individuals are showing keen interest in the market. Dubai, along with neighborhood areas such as Palm Jumeirah, Emirates Hills, and Jumeirah Bay Island, is high on customers' lists. Dubai's relative affordability and prime home prices of around USD 800 per square foot make the city one of the world's most affordable luxury residential markets. Prime values are fuelled by Dubai's safe-haven status, an exceptionally diverse range of international ultra-high-net-worth individuals searching for (their) second luxury homes, combined with the government's world-leading response to the pandemic, which spurred business confidence. It is predicted that prime residential prices will rise by 2.0% on average in 2023, down from the 2.7% predicted six months ago. Despite this slowdown, aggregate growth in 2023 would still be higher than that recorded in six of the last 10 years.
The FIFA World Cup in Qatar was expected to boost property prices in Dubai. As per sector experts, due to the soccer tournament, which was held in the Middle East for the first time, there was a shortage of accommodation, implying that the spillover was expected to stay in the United Arab Emirates, primarily in Dubai. This factor boosted the already high property markets, leading to a boost in luxury real estate sales. World Cup-linked tourism positively impacted Dubai's hospitality sector, including its short-term rental market. Brokers expect to see a big impact on luxury-residential real estate, which has undergone a boom since the onset of the pandemic. As per reports, prime properties in some neighborhoods of Dubai have already doubled their prices and have seen good bookings by high-net-worth individuals.
Record Growth in Transactions Driven by Offplan Properties and Apartments
The value of real estate market transactions in Dubai surpassed AED 240 billion (USD 65.33 billion) in 2022, recording a 61% gain compared to the previous year. The Dubai market also experienced a record-breaking year in 2022, where registered sales reached 88,028 transactions as of November 2022, up from 60,258 transactions in 2021, representing a significant increase of 46% and surpassing the market peak in 2013 by 38%. The success of 2022 was led by the sale of off-plan properties in Dubai, which showed a growth of 86% in comparison to the previous year. In 2022, off-plan transactions accounted for 44% of total transactions, up from 40% in 2021, reaching AED 83 billion (USD 22.59 billion). When it came to property types, apartments dominated the Dubai market in 2022, representing 85% of the transitions, with villas/townhouses representing the remaining 15%.
In contrast to 2021, when transactions were valued at about AED 44.6 billion (USD 12.14 billion), the value of transactions climbed to 35% of all transactions by reaching a total of AED 83 billion (USD 22.59 billion). The first sales transactions for apartments saw the largest numbers (in value). In contrast, the overall value of the transactions for villas/townhouses beat the previous mark established in 2021 to be the highest ever recorded. Due to the volatile market conditions, 2022 saw shifts in consumer behavior. The market had a record-breaking performance due to rising demand, recent events and initiatives like the FIFA World Cup, the golden visa, and larger attempts to shift to a digitally driven economy. The most frequently searched apartment neighborhoods in 2022 were in the city's core, including Palm Jumeirah, Downtown Dubai, Jumeirah Village Circle, Jumeirah Beach Residences, and Jumeirah Lakes Towers.
