Global real estate services provider Savills has released its Dubai Property Market report for 2023, which revealed a robust year across different sectors in Dubai’s real estate market. Residential transaction activity grew by 29% year-on-year to an all-time high of 118,200 units.
Dubai’s real estate market has seen steady growth over the past year, driven by the increase in expatriate population, policies such as the recent change to the rules for real estate investors to qualify for the Golden Visa, and Dubai’s growing and diversified economy overall.
Savills state that the residential sector had its best year on record. Transaction activity grew by 29% y-o-y to an all-time high of 118,200 units. This was the first time the total transaction volume surpassed the 100k mark. The residential market has witnessed an upward trend since 2021, when 55,500 units were transacted, growing by 69% y-o-y.
“The macroeconomic sentiments for the UAE remain favourable. The non-oil sectors have seen significant expansion over the past two years, remain healthy, and are well positioned to grow over the next twelve months, which will benefit the real estate sector. However, there may be a risk of oversupply for select assets across a few locations, which may limit any significant increase in average prices going forward.”
Swapnil Pillai, Associate Director of Research, Savills Middle East
Savills reports that within two years, activity levels more than doubled, creating a new milestone for the market. Dubai is now among the few global cities that have sustained growth in demand, which started after the Covid-19 restrictions were lifted.
Under-construction properties dominated demand during the year as 55% of the units sold were off plan. Throughout the year, and more so during the second half, there has been a shift towards investment-led demand while end-user activity has marginally subsided, according to Savills. A total of 65,000 off-plan units were sold in 2023 while 53,200 ready units were sold during the year.
Throughout 2023, market activity continued to shift towards sub-markets in the southeast of the emirate. Over 52% of the total units sold in 2023 were concentrated here. Transaction activity was prominent across locations such as Jumeirah Village Circle, Dubai Sports City, Arabian Ranches, and Dubai Hills Estate, among others.
Savills states that apartments continued to be the most transacted property type, accounting for 78% of the total transactions recorded in 2023. Meanwhile, the demand for villas and townhouses remained stable.
Locations like Damac Lagoons, Damac Hills 2, and Arabian Ranches 3 were among the popular locations for villa transactions. Popularly transacted locations had new villa completions in the year, like Joy Townhouses in Arabian Ranches 3, Chorisia Villas in Al Barari, etc, which could be the primary driver for the ready transactions.
