In Dubai alone, nearly 57,000 units were purchased during the first half of 2023, putting the residential market on pace to have its busiest year ever.
Savills, a leading global provider of real estate services, stated in its most recent report that the number of residential transactions increased by 44 percent from the same period last year to 57,700 units transacted. 11,600 villas and 46,100 apartments were included.
Transaction activity levels in H1 2023 are up 209% from the five-year average for this time period.
“Historically, the summer months in the UAE have been known to be slow as many residents travel during the school break. However, this trend seems to be changing in recent times as Dubai property continues to find favour among residents and international audiences looking for stability amid an uncertain economic environment,” said Swapnil Pillai, Associate Director of Middle East Research at Savills.
“Whilst it is still early to comment on the overall take-up during the usually slow summer period, early indicators suggest that market activity is likely to remain strong.”
Apartment units accounted for the majority of the 28,400 units absorbed in Q2 across the city, recording a year-over-year growth rate of 33%.
Off-plan remains strong
During the first half of the year, buyers’ activity in the off-plan market sector, which accounted for over 53% of the units sold, increased significantly.
According to Savills, the increase in demand for off-plan purchases shows that buyers are choosing to put off committing to expensive loan terms in the current financial climate. Additionally, it reflects a rise in the number of new project launches, which increased to 27,900 units in the time frame from 24,900 units in H1 2022.
Property price growth steadies
Although real estate prices have kept rising, the rate of rise has marginally moderated.
In some areas with major handovers and projected supply, the double-digit price increase that was seen across virtually all micro-markets last year has started to moderate, according to Savills.
While this is going on, price increases in established areas with little new supply and lower vacancy rates is continuing to be somewhat more sustained.
One of the most sought-after residential areas in Dubai, Palm Jumeirah, saw one of the biggest half-yearly price growths for apartments. Prices increased generally by 19% as compared to H2 2022.
Other markets with strong growth rates were Downtown Dubai and Dubai Marina, where unit prices increased by 14 and 11%, respectively.
Al Furjan (9%), Sports City (8%) and Town Square (5%) were further rising locations. Prices in these places have risen slightly, but future supply and high vacancy rates could restrain expansion.