Dubai’s real estate market recorded an unusually busy summer period with AED 92.6 billion during the third quarter of 2023, a new report finds.
The summer months in Dubai, usually characterised by scorching temperatures that can peak as high as 50°C, are often the slowest months for investor activity, events and tourism. However, Q3 this year shaped up to be an exceptionally active investment period with a 6 percent increase in sales compared to Q2.
“Dubai’s real estate market continues to attract global investors and end-users seeking premium lifestyle destinations,” said Lewis Allsopp, CEO of Allsopp & Allsopp.
“The Summer months are usually slower but sales picked up strongly in Q3, retaining buyer and tenant interest even during the peak of Summer.”
Real estate brokerage Allsopp & Allsopp also reported a 72 percent surge in client registrations between July and September versus the same period last year. Sales volumes increased 13 percent year-on-year, showing growing consumer confidence in the market. Volume also rose by 2.8 percent over the previous quarter to 29,341 transactions.
When looking at year-on-year trends, the increases are even more impressive. Sales values were up 38 percent compared to Q3 2022, while volumes jumped 21.5 percent, signaling growing interest from global investors and end-users.
Off-plan sales made up 47 percent of total volume, with a transaction value of 36 percent, while secondary market transactions made up the remaining 53 percent in volume and a commanding 63 percent in value.
Apartments recorded 69 percent of the overall transaction volume and 43 percent by value. Villas and townhouses accounted for the remaining portions of 24 percent by volume and 41 percent by value.
The highest percentage of properties sold fell within the AED 2-3 million price range. Notable individual sales included apartments at Marsa Al Arab and Six Senses exceeding AED 400 million and AED 200 million respectively.
Palm Jebel Ali, other new projects fuel Dubai investor demand
Several major new projects were also launched on to the market in Q3, providing attractive investment and living options and boosting the usually quiet period to new heights.
Palm Jebel Ali, the newest extension to Dubai’s iconic Palm islands, began handovers of residences last week, causing a frenzy among many realtors and buyers looking to cash in on the lucrative investment.
“We have seen the super successful launch of Palm Jebel Ali, which has seen overnight queues in Dubai reminiscent of the 2006-2007 era, and people such as international investors around the world have got an eye on this iconic investment,” said Lewis Allsopp.
“However, the difference between 2005, 2006, 2007, and today is that the payment plans are a lot more aggressive in favour of the developer. They collect more money up front, securing the long term build of the development. Which makes it a really good thing for most of these launches.”
In 2006, projects were launched with 10 percent down payment and 90 percent on completion, causing many developers to not have the cash to build, he explained.
“Now you’re finding developers taking a lot more from some, it’s like 20 percent on completion and 80 percent over construction,” he added.
Elsewhere in Downtown Dubai, DIFC Living debuted 379 luxury residences and retail space beside the financial hub.
Both developments are aimed at high-net-worth buyers and have received significant interest since launches.
The real estate firm’s CEO also told Arabian Business that he expects to see more successful ultra-luxury project launches, as the price per square food of off-plan is “dramatically outstripping” the prices for ready properties.
“We still see plenty of growth with the currently ready properties that will catch up with the off-plan properties when they are handed over. So it’s creating a healthy cycle in the market. Just to be clear on that, off-plan properties are more expensive than ready properties but that’s good for ready properties because when they hand over, there’s a benchmark to get to that value.”
Dubai rental market goes from strength to strength
Consumer demand wasn’t only evident in sales – the rental sector also showed strength.
Allsopp & Allsopp reported rental property viewings and client registrations both rose markedly in Q3 versus the same period last year, underscoring the resilience in Dubai’s rental market.
It also indicates growing numbers of expats relocating to the emirate for work or leisure.
Additionally, the firm launched a new ‘Data Hub’ tool to provide transparency on historical property prices to users. Through its new partnership with Property Monitor, the tool will provide live listings alongside exclusive insights on similar properties in the same area that are selling or renting below market rate or offer larger space.
“Users can also view monthly price change trends and recently sold or leased properties in any given community. Drawing from Dubai Land Department data, each listing auto-updates every 15 minutes, keeping users equipped with real-time market intelligence to inform both off-plan and ready purchases,” Head of Developer Sales at Allsopp & Allsopp, Fintan Flannelly, told Arabian Business.
“This feature on the website will also provide you with a detailed list of communities that have been sold or rented in the last 180 days. The data is provided by the Dubai Land Department, offering you accurate and verified information.”
From off-plan sales to readily available ones, the feature aims to help people understand how the market is performing, what Dubai’s current top performing communities are and find the community that matches their budget.
With activity levels higher than usual for the season, 2023 is cementing its position as one of Dubai’s best-ever years for real estate.
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