Dubai real estate sales hit $112bn last year and the booming property market is set to see further price increases this year, according to data from Bayut.
Bayut has unveiled its 2023 Dubai Property Market Report, shedding light on the most coveted areas within the emirate’s real estate sector.
The report shows that Dubai’s property sector ended 2023 on a high and Bayut forecasts an upward trajectory of property prices in the city, establishing a favourable setting for sellers and landlords.
Dubai real estate trends
The report also identifies the areas with the best return on investment last year.
Property prices in Dubai Production City (IMPZ) saw an increase of more than 49 per cent, while Discovery Gardens offers return on investment of around 11 per cent, based on rental yields, the data and forecasts show.
This sustained uptrend aligns with the heightened demand fuelled by the influx of investors and residents, resulting in unprecedented growth in the real estate market.
Bayut’s data indicates a notable uptick in sales prices for apartments and villas across prime neighbourhoods in Dubai, registering surges of between 4 and 21 per cent in 2023.
In the affordable property segment, potential investors and home buyers have shown heightened interest in:
- International City
- Dubai Residence Complex
- DAMAC Hills 2
- Dubailand
Property buyers with a mid-range budget have gravitated towards areas like Jumeirah Village Circle, Dubai Silicon Oasis, Al Furjan and The Springs.
Conversely, luxury property investors have demonstrated a preference for Dubai Marina, Business Bay, Arabian Ranches and Dubai Hills Estate during 2023.
For budget-friendly apartments, transactional sales prices in sought-after areas have witnessed increments ranging between 5 and 50 per cent.
The average transaction prices for affordable villas have generally decreased by 10 per cent to 26 per cent, with the exception of DAMAC Hills 2, which recorded a minor increase of 0.54 per cent.
In the mid-tier property segment, the average sales transaction prices for apartments have generally increased by up to 3 per cent.
Jumeirah Lake Towers has been an outlier, where the transactional sale price has decreased by 0.77 per cent.
Sought-after areas with mid-tier villas have reported a 15 to 21 per cent increase in average transaction sales price.
In the luxury property sector, most areas have seen a consistent appreciation in transactional prices of between 3 per cent and 17 per cent.
According to Bayut data, 2023 saw a total of 132,628 property sale transactions, amounting to a total value of AED409.8bn ($112bn), including both residential and commercial purchases.
On examining the return on investment (ROI) based on projected rental yields for apartments, specific areas like DIP, Liwan and Discovery Gardens have emerged as the healthiest options for potential investors, offering yields of up to 11 per cent.
When it comes to apartments in the mid-tier segment, Dubai Silicon Oasis, Dubai Sports City and Motor City have been the most compelling options, offering rental yields of up to 9 per cent.
In the luxury apartment segment, areas like Al Sufouh, Green Community and Jumeirah Golf Estates delivered impressive returns of up to 10 per cent.
Bayut’s ROI trends for villa communities also portray a positive outlook. Buy-to-let villas and townhouses in Al Rashidiya boast an average ROI exceeding 9 per cent, making it an enticing prospect for potential investors.
Similarly, areas such as International City and Jebel Ali are offering ROI percentages exceeding 8 per cent.
The mid-tier villas in JVC, Town Square and Reem have recorded projected ROIs of between 6 per cent and 8 per cent.
In the luxury villa category, Al Barari stands out with an ROI surpassing 8 per cent.
Bayut said that the number of transactions in Q3 2023 was close to AED100bn ($27bn) and forecast further growth, saying: “It would be safe to anticipate that this property boom is here to stay for 2024”.
Furthermore, the supply-demand dynamics in the UAE property market play a crucial role in price movements.
With limited new supply entering the market, especially in sought-after locations, the scarcity of available properties is expected to drive prices upward due to increased competition among buyers.
Haider Ali Khan, CEO of Bayut and Head of Dubizzle Group MENA said: “The Dubai property sector has maintained its commendable growth trajectory, concluding 2023 on a high note.
“Our data reveals sustained progress in property prices, driven by heightened demand from investors and residents wanting to own property in this promising market.
“There are notable upticks in sales prices across various segments, reflecting the appeal of Dubai’s real estate landscape.
“The impressive total of property sale transactions in 2023, amounting to close to AED410bn ($112bn), solidifies the robustness of the market.
“As we prepare ourselves for 2024, the heightened demand for properties is expected to increase, owing to the launch of various new primary projects attracting a lot of investors from across the globe”.
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