In November, off-plan sales decreased, but overall, Dubai’s residential transactions reached new highs in the first 11 months of this year, due to a slight decrease in rising prices.
However, according to CBRE’s Dubai Residential Market Snapshot – December 2023, the total number of residential transactions in Dubai in November was 9,034, which was a 13.2% decrease from the same month the previous year.
“This slowdown in activity levels has been driven by a decline of 26.4 percent in off-plan sales, whereas secondary market sales registered an increase of 5.1 percent. In the year-to-date to November 2023, the total volume of transactions reached 112,356. This is the highest level on record to date,” CBRE said.
“Dubai residential market continues to extend its record-breaking total, with 112,356 transactions taking place in the year to date to November 2023. This is up by 22.5 percent from its 2022 full-year total,” said Taimur Khan, head of research – Mena at CBRE.
Compared to the same period in 2022, Dubai’s real estate market grew significantly in the first nine months, with a 36.7% increase in transaction value and a 33.8% increase in the number of transactions. The Dubai Land Department reported 116,116 real estate transactions valued at Dh429.67 billion during this period, attributing this growth to the city’s worldwide reputation, strong infrastructure, and the development-oriented commitment of its leadership. The value of real estate investments increased by 50.3%, the number of investments increased by 33.3%, and the number of investors increased by 37.4% as 81,669 investors registered 109,186 investments totaling Dh278.7 billion.
CBRE reports that average price growth in Dubai’s residential market has moderated somewhat; in the year ending in November 2023, average prices increased by 18.9%, down from 19.1% a month earlier. The average price of a villa increased by 22.2% during this time, while the average price of an apartment increased by 18.3%. The average cost of an apartment was Dh1,374 per square foot as of November 2023, while the average cost of a villa was Dh1,679 per square foot. While several submarkets have long since surpassed their 2014 comparable figures, these average apartment sales rates are still 7.7% below the record highs recorded in 2014. Right now, average villa sales rates are 16.2% higher than in 2014.
With a sales rate per square foot of Dh2,497 in the apartment market, Jumeirah had the highest sales rate per square foot; in the villa market, Palm Jumeirah had the highest sales rate per square foot with Dh5,217.
The average residential rent in Dubai increased by 19.2% in the year ending in November 2023, down from 19.7% a month earlier. This indicates that the growth rate in the rental market has moderated in Dubai. The average rent for an apartment increased by 19.6% during that time, while the average rent for a villa increased by 16.6%. The average yearly rent for an apartment was Dh 111,622 and for a villa was Dh 24,835. According to the report, the highest average yearly rents for apartments and villas were found in Palm Jumeirah, where they averaged Dh258,335; and in Al Barari, where they averaged Dh1,150,552.
“This year’s total has been bolstered by large portfolio transactions and delayed registrations in the last couple of months; however, we expect the number of transactions to continue to recede in the coming months. This is expected to be largely underpinned by decreasing levels of off-plan sales, understandably so with developers looking to deliver the somewhat significant quantum of recently launched projects. In turn, we expect this slowdown in transaction volume to continue to support moderation in the rate of price and rental growth,” said Khan.