Do you want to invest in real estate, in Dubai?
In this article, we put in your hands everything you need to know about the real estate market in Dubai, including statistics, expectations, and the future of this market.
The Dubai real estate market is one of the most important Arab and international markets, as this sector is witnessing an active and continuous movement. In this article, Frank Vitto (CEO at Starling Properties) will get to know this market in terms of size, performance, sales for the past year, and other essential details in this context.
A historical look at the real estate market in Dubai has witnessed significant changes and developments over the years. In the 1960s and 1970s, Dubai was still a relatively young city and at the beginning of its development. The real estate was mainly owned by individuals or small groups, with few market controls.
The city began experiencing significant economic growth during the 1980s and 1990s. The government has invested extensively in infrastructure and development projects, giving the city development and growth.
The real estate market also began to boom as the government introduced incentives to attract foreign investment. The real estate market in Dubai witnessed a boom in the early 2000s, fueled by easy credit, high oil prices, and a growing population. Developers launched ambitious projects, including the world’s tallest building, Burj Khalifa, and the artificial island of Palm Jumeirah.
Dubai’s real estate market, with a mix of residential and commercial properties, is an important part of the city’s economy. The government continues to invest in infrastructure, construction, and development projects to attract investors from all over the world.
The real estate market in Dubai has witnessed significant positive changes and developments over the years and will continue to evolve in response to new economic and regulatory conditions.
Dubai real estate market size
The real estate market in Dubai is one of the world’s most dynamic and diversified markets. The market size has grown significantly in recent years, driven by a combination of factors such as strategic location, encouraging government policies, growing population, and the development of a strong tourism sector.
The luxury residential market witnessed deals worth 14.7 billion dirhams in the first quarter of this year, 2023, and the volume of the luxury real estate market in the first quarter also reached 21.7% of the total residential real estate market in the city.
The average price per square foot for luxury properties grew by 21.07% to AED 3,373, and the average property price overall was AED 25.2 million, an increase of 27.49% compared to the fourth quarter of 2022.
Its residential areas continued to achieve positive sales volume growth quarterly; the Al Barari region recorded a growth rate of 167.53%, achieving an amount of 926 million dirhams, while Jumeirah Bay recorded a growth of 220% and an amount of 2.05 billion dirhams. In comparison, Downtown Dubai increased by 48.78% at 3.4 billion dirhams, and Emirates Hills increased by 11.62%. And the amount of 613.6 million dirhams, while Palm Jumeirah witnessed an increase in average prices that reached 17.26% every quarter, achieving an amount of 9.5 million dirhams, benefiting from sales of 5.7 billion dirhams for luxury residential properties.
In the Jumeirah Bay area, residential apartment sales amounted to 91.2 million dirhams, which means an increase of 40%, mostly in Bulgari Resorts, Residences, and Lighthouses, which ranked first in the list of the most expensive deals, with a value of 410 million dirhams.
The price per square foot was the highest in Palm Jumeirah at Dh3,106, followed by Emirates Hills at Dh2,396. Jumeirah Bay’s sales volume increased by 220% every quarter.
In the luxury villa market, 294 villas were sold, achieving an amount of 5.6 billion dirhams. As for the first three regions that recorded the highest sales volume of luxury villas, they were Palm Jumeirah with an amount of (1.9 billion dirhams), Dubai Hills state with an amount of (1.6 billion dirhams), and Al Barari with (926 million dirhams).
The average luxury villa in terms of cost is AED 36.8 million, an increase of 37.2% every quarter. The average price per square foot of luxury villas jumped by 53.15% every quarter, amounting to AED 3,547 per square foot. Notably, 88% of the luxury villa market sales were residential.
With the entry into the second quarter of 2023, large-scale residential real estate transactions are expected to grow and increase, based mainly on the current lifestyle and the desire of foreign Europeans and others to own property.
Dubai real estate market performance in 2023
The year 2023 witnessed a performance that exceeded expectations, as statistics recorded record transactions in the real estate registry. The demand for real estate continued to increase until the end of the year. That was not limited to sales; It also included the rental movement, which increased to 24% in low-cost apartments and 54% in luxury apartments. As for villas, it reached 23% for low-cost villas and 54% for luxury villas.
Regarding residential units, the search focused on low-cost units, and customers focused their interests on Jumeirah Village Circle and Bur Dubai.
As for low-rent villas, Damac Hills and Mirdif were the most popular, while Dubai Marina and Business Bay were the most attractive for luxury apartments. Al Barsha and Jumeirah remained the preferred options for those looking for villas.
The Dubai Marina area remained the most demanded by investors looking for luxury apartments, and the price per square foot increased by 11.62%, followed by: Business Bay, Downtown, Palm Jumeirah, and Jumeirah Beach Residence, with an increase of 15% in the price, per square foot.
According to statistics, Jumeirah Village Circle remained the most popular option for apartments with medium prices, as the sale price of apartments recorded an index of 7.25%, achieving 869 dirhams for the average price per square foot.
Areas such as Dubai Oasis, International City, Jumeirah Lakes Towers, and Dubai International City had a special interest for those looking for low-priced apartments. It recorded an increase of 11% for the average sale per square foot, and the highest recorded increase in real estate prices was in Jumeirah Lakes Towers.
As for the villa sector to own, the area: Dubai Hills Estate has attracted interest from large investors; as statistics recorded, the average price per square foot amounted to 1541 dirhams, an increase of 17.3%, for the past year. At the same time, the prices of luxury villas in areas such as Palm Jumeirah, Arabian Ranches, and Damac Hills increased by 24% as a result of the interest of investors in them.
Real estate sales in Dubai to foreigners in 2022
In 2022, the emirate of Dubai achieved record results in terms of real estate deals, with a total value of $143 billion, according to what was announced by the Dubai Government Media Office, describing the matter as an exceptional achievement.
The record growth of the real estate sector comes at a time when Dubai is witnessing a strong demand by Russian expatriates to buy real estate in some of the most famous areas in the emirate. The value of the real estate sector in the emirate recorded a record growth of 76.5% by the end of 2022, exceeding half a trillion dirhams for the first time.
The real estate sector represents about a third of Dubai’s economy, and this sector has recorded steady growth since the easing of restrictions imposed to contain the “Covid-19” epidemic.
According to the data released, Russians constituted the largest segment of foreign real estate buyers in Dubai last year, as the emirate witnessed more than 86,000 residential real estate sales in 2022, exceeding the record registered in Dubai, which is 80,000 in 2009. Properties worth 208 billion dirhams were sold. ($56.6 billion) last year, achieving an increase of 80% over 2021.
European investors (Russians, British, Italians, and French) dominated real estate transactions last year and were among the top five.
While Indian investors came in third place, foreign investment is expected to increase in parallel with the competition of investors from Asia and China, especially for European investors in the real estate sector in the city.
Reasons for the interest of foreigners in the Dubai real estate market
There are several reasons behind the interest of foreigners in the real estate market in Dubai, the most important of which are:
- Tax Advantages: Dubai has no personal income tax, no capital gains tax, and no property taxes, making it an attractive destination for foreign investors seeking to minimize the burden on financial payments.
- Strategic location: Dubai is located at the crossroads of Europe, Asia, and Africa, making it an important center for trade and investment. The city’s proximity to the main surrounding markets and its excellent infrastructure make it an attractive location for business and investment projects.
- Strong Economy: Dubai has a diversified and growing economy. With interest in sectors such as finance, tourism, and real estate, the city’s economic stability and growth potential make it an attractive destination for foreign investors seeking to diversify their investment portfolios.
- High rental yields: Rental yields in Dubai are among the highest in the world, with some property yields as high as 10%. That makes it an attractive destination for investors looking to increase their profits in the vital sector.
- Luxury real estate: Dubai is known for its luxury real estate, including modern villas, apartments, and high-end boutiques. That simultaneously makes it an opportunity for full-featured housing and investment in the high-end real estate market.
- Incentive laws: In the city of Dubai, there are several laws to attract foreign investment in the real estate market, including providing long-term visas for real estate owners and reducing transaction costs associated with buying and selling real estate and other related facilities and features in this field.
What are the real estate market expectations in Dubai 2024?
It is expected that the real estate market in Dubai will continue to grow and develop in the future, driven by several factors, such as exhibitions that encourage investment and the commitment of the Dubai government to large investments in infrastructure development, including new transportation projects, such as the expansion of the Dubai Metro and Hyperloop from Dubai to Abu Dhabi, And building new residential and commercial projects.
These investments drive economic growth and support the real estate market. The city has implemented several regulatory reforms in recent years to increase transparency, protect investors and enhance the overall competitiveness of the real estate market.
These reforms are expected to continue, increasing the market’s attractiveness to local and foreign investors. The growth of Dubai’s population, driven by factors such as job opportunities, lifestyle, and a favorable business environment, is fueling future demand for residential and commercial properties.
Imtilak Global tips for those wishing to invest in the Dubai real estate market
If you are thinking of investing in the real estate market in Dubai, here are some tips to keep in mind:
- Conduct thorough research: Before investing, it is important to conduct thorough market research, including the latest trends, regulations, and developments. That helps you make informed decisions and avoid potential risks.
- Seek professional advice: Consider seeking advice from a company, a professional real estate agent, or a financial advisor with experience in the Dubai market. They can help you navigate the market and provide valuable insights into investment opportunities.
- Determine your investment goals: Consider your investment goals, whether you’re looking for long-term capital appreciation or rental income.
- Choose the right location: Dubai is a diverse city with various developed neighborhoods and districts. It is, therefore, important to consider the location of the property you are interested in, including its proximity to transportation, utilities, and attractions, and the potential for rental income or capital appreciation upon sale.
- Monitor Market Trends: Stay current with the latest market trends and developments in Dubai’s real estate market. That helps you identify new investment opportunities and make the right decisions about your investment projects.
Imtilak Global is your unique entrance to the Dubai real estate market.
Suppose you aspire to enter the real estate market in Dubai. In that case, Imtilak Global is the important gateway to achieving your ambitions as it meets your aspirations. It provides you with ownership services within the most luxurious residential projects in the most prestigious neighborhoods of Dubai International.
According to modern and modern life, with multiple options, stunning views, and spaces suitable for the individual and the family. Social and entertainment services accompany that. It is also your guide to owning commercial real estate from stores or offices while offering prices suitable for owners or investors. For more information or inquiries, Do not hesitate to contact Global Real Estate, real estate experts in the UAE.
