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Dubai set to record busiest year for residential sector

The findings of a survey released by a global real estate services provider show that 46,100 apartments and 11,600 villas were sold in H1 2023

The current year is on track to be the busiest year for the residential sector in Dubai on the back of record half-yearly transactions of 57,700 units across villas and apartments, an upswing of 44 per cent.

The findings of a survey released by a global real estate services provider Savills show that 46,100 apartments and 11,600 villas were sold in H1 2023, the highest half-yearly transactions on record. When compared to the five-year average, activity levels are up by 209 per cent in the current period.

However, according to Dubai Lands Department, the real estate sector in Dubai, also including the commercial property sector, recorded the highest semi-annual sales ever in the first six months of 2023 with a total of 60,440 sales transactions worth Dh177.3 billion, according to the Dubai Land Department.

“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.

He said while 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. A total of 28,400 units were absorbed across the city in Q2, recording 33 per cent yearly growth, with apartment units taking up the major chunk.

According to Savills research, activity in the off-plan segment remains strong, making up close to 53 per cent of the units sold. The increase in off-plan transactions indicates buyer preference to delay committing to high lending rates in the current economic environment. “It is also reflective of an increase in new project launches that have jumped to 27,900 units during H1 2023, compared to 24,900 units in all of 2022,” said Pillai.

JLL’s Q2 Market overview report shows that in the second quarter of 2023, off-plan residential sales increased by 38 per cent year-on-year in value and 30 per cent in volume in Dubai, while the value of off-plan transactions in Abu Dhabi more than doubled from Dh 1.8 billion to Dh 3.8 billion. In Dubai, most (57 per cent) of the transactions in the category were recorded between Dh500,000 and Dh2.0 million, with investors primarily focusing on studios and 1BR units in areas like JVC, Dubailand, and MBR City.

A survey by Kamco Invest shows that propelled by the remarkable buoyancy of Dubai real estate sector, property sale transaction value across the GCC surged 9.9 per cent to $90.7 billion year-on-year in the first half of 2023. Dubai’s property transactions contributed 54 per cent of the region’s total transacted value, offsetting the decline of the other key markets such as Saudi Arabia, Qatar, and Kuwait in the first half.

Savills report noted that while the bulk of the off-plan transactions were observed for apartments. villa and townhouse developments were preferred in the ready category. A total of 67 per cent of villa and townhouse transactions during H1 were for ready units. Damac Hills 2, Al Furjan, and Dubai Hills Estate have been popular locations for ready villa units.

“Asset prices continue their upward trajectory; however, the pace of growth has slowed slightly. The double-digit price growth that was witnessed across nearly all the micro-markets throughout most of 2022 has started to taper in locations with significant handovers and planned supply,” Svaills report said. Meanwhile, price growth across established locations with limited upcoming supply and lower vacancy levels remained relatively more sustained.

issacjohn@khaleejtimes.com

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