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
The residential sector in Dubai’s property market had its best year on record in 2023, with transaction activity posting a 29 percent annual growth to an all-time high of 118,200 units, a latest industry report said. This was the first time the total transaction volume surpassed the 100,000 mark in the emirate’s property market. Dubai real estate: The true cost of buying property beyond the listing price Dubai’s real estate market has also 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, a global real estate services provider, said. According to the report, Dubai is now among the few global cities that have sustained growth in demand, which started after the Covid-19-induced restrictions were lifted. “Under-construction properties dominated demand during the year as 55 percent of the units sold were off-plan,” the Dubai Property Market Report for 2023. It said 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. A total of 65,000 off-plan units were sold in 2023, while 53,200 ready units were sold during the year. Transaction activity was prominent across locations such as Jumeirah Village Circle, Dubai Sports City, Arabian Ranches, and Dubai Hills Estate, among others. Apartments continued to be the most transacted property type, accounting for 78 percent of the total transactions recorded in 2023,. Swapnil Pillai, Associate Director of Research, said 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,” he said. Dubai office real estate boom in 2023 The office real estate market witnessed a surge in demand in 2023, riding on the back of sustained economic growth, expanding non-oil sector, ongoing push to improve the ease of doing business, and government initiatives to support job creation, the report said. Throughout the year, demand was concentrated across good quality green-certified assets, a gradual yet evident move towards more sustainable operations is driving this trend. Limited supply of Grade A assets which are most in demand has caused vacancy levels to drop, resulting in a spike in rentals. Buildings in the DIFC micro-market and Grade A developments around it were among the most sought-after developments, especially from companies in the financial services and advisory/consultancy sector, adding that this led to an average 22 percent y-o-y increase in rents across DIFC. Paula Walshe, Director of Transactional Services said unlike other global markets, where demand for office space remains low compared to the pre-pandemic average, in Dubai, the general theme for 2023 was one led by expansion and new market entrance. “Mergers and acquisitions (M&A) activity across the country also led to consolidation-led demand for office space across the city,” Walshe said. Co-working operators continued to expand their footprint in the city, owing to strong demand for well-managed spaces that offer flexibility and cost-effective options. Industrial real estate thrives The industrial and logistics sector in Dubai was among the most resilient real estate asset class in the city, with market activity remaining buoyant throughout 2023, on the back of continued expansion in the non-oil sector, the report said. Good quality assets continue to be in short supply, particularly larger facilities over 10,000 sqm, as occupiers expand their warehouse footprint. Demand for built-to-suit warehousing space was particularly strong from companies as they plan for future expansions and invest in modern warehouse facilities, which offer better operational functionality and sustainability features,