Dubai real estate sector sees near 59 per cent increase in off-plan sales
The Dubai real estate sector has seen sale prices increase more than 19 per cent and rents up by over 21 per cent in the past year, according to CBRE analysis.
The total volume of transactions in Dubai’s residential market stood at 11,328 in August 2023.
This is the second-highest monthly figure ever registered, up by 22 per cent compared to the previous year.
Dubai real estate growth
Over this period, off-plan sales increased by 58.7 per cent, while secondary market sales dropped by 10.2 per cent.
In the year to date to August 20231, a total of 79,605 transactions were registered, the highest on record over this period.
In the sales market, price growth continues to accelerate. In the 12 months to August 20232, average prices rose by 19.6 per cent, up from 18.1 per cent a month earlier.
Over this period, average apartment prices rose by 20 per cent, and average villa prices rose by 17.3 per cent.
As at August 2023, average apartment prices reached AED1,344 per square foot, and average villa prices reached AED1,571 per square foot.
Average apartment sales rates sit 9.6 per cent below their 2014 comparable peak; although several communities have already topped their 2014 peak benchmarks.
Average villa sales rates, on the other hand, now sit at 8.7 per cent above their 2014 level.
In the apartment segment of the market, Downtown Dubai registered the highest sales rate per square foot at AED2,460, whereas, in the villa segment of the market, Palm Jumeirah registered the highest sales rate per square foot at AED4,915.
In the rental market, there is a slight moderation in the rate of growth.
Average rents in Dubai rose by 21.7 per cent in the year to August 2023, down marginally from 22 per cent in July 2023.
Over this period, average apartment rents increased by 21.5 per cent, and average villa rents rose by 22.6 per cent.
In August 2023, the average apartment and villa rents stood at AED106,674 ($29,000) and AED322,573 ($88,000) per annum, respectively.
The highest yearly apartment and villa asking rents have been registered in Palm Jumeirah, with average rents reaching AED257,173 ($70,000) and in Al Barari, with average rents reaching AED1,108,164 ($302,000).
Taimur Khan, Head of Research – MENA at CBRE in Dubai, said: “Dubai’s residential market continues to register substantial levels of growth.
“In the year to date to August 2023, the total volume of transactions reached 79,605, the highest on record over this period, marking an increase of 41.7 per cent from the previous year.
“These strong activity levels within the sales market are underpinning stronger price growth, where in August 2023, average prices registered a year-on-year increase of 19.6 per cent, up from the 18.1 per cent increase recorded in July 2023.
“That being said, this increase hides some softening of growth in the prime segment of the market, where we are still seeing the pace of price growth slowing within a number of core and prime residential areas.
“Although demand remains steadfast, we are seeing that the rate of rental growth continues to moderate, making this the seventh consecutive month in which this has occurred.
“A total of 376,211 rental transactions were registered in the year to date to August 2023, marking an 8.7 per cent increase compared to the year prior, and a 48 per cent increase from the comparable 2019 period.
“This growth has been supported by a 28 per cent growth in renewed registrations, while new rental contracts registered have dropped by approximately 12 per cent.
“This significant decline in new rental registrations arises from the elevated costs that can be incurred when relocating or taking on new leases, which, as a result, has created substantial bifurcations between new and renewed rental rates.”