30 October 2023, Gulf Today
Bayut, the UAE’s leading property portal, has released its Dubai Property Market Report for Q3 2023, unveiling the most sought-after areas in the emirate’s real estate sector. Following the launch of their first-of-its-kind, AI-based property search assistant BayutGPT, Bayut has once again provided property seekers an important repository of data with this new report, designed to facilitate better decision-making and deeper market intelligence.
As per the search trends on the platform, property prices in Dubai have continued their upward trend, creating an ideal environment for sellers and landlords. The sustained increase in prices is consistent with trends observed over the last 18 months, with higher demand and greater influx of new residents creating unprecedented booms.
Data from Bayut shows that sales prices for apartments and villas in Dubai’s prime neighbourhoods have risen by 2-12% in Q3 2023.
Commenting on the findings, Haider Ali Khan, CEO of Bayut and Head of Dubizzle Group MENA said: It has been an absolute pleasure commenting on the real estate trends for the past few years for the UAE market overall and Dubai in particular, what we’re seeing in Q3 2023 reinforces the fact that this market is not showing any signs of slowing down. While major economies around the world are still struggling with the post-pandemic economic slowdown, the UAE is well on its way to breaking records with growth across major sectors including tourism, real estate and energy. Considering the level of interest Dubai is garnering these days, it’s more important than ever for us to showcase the best of Dubai real estate, highlighting authenticity and availability, which are the cornerstones of how Bayut operates..
We have seen consistent growth in platform traffic and inventory throughout the course of this year, a trend that is further validated by the latest transaction data from DLD. As of today, our industry is proving resilient in a dynamic and fast-changing world. At Bayut, we are keeping close to shifting market conditions and we also recommend property seekers to make use of our various tools, including Dubai Transactions to understand the market better, make smarter decisions and provide transparency to capitalise on some of the amazing available to them.”
For affordable apartments and villas, the most searched areas by home buyers and investors include Jumeirah Village Circle (JVC), Dubai Silicon Oasis, DAMAC Hills 2 and Al Furjan, while luxury property seekers have favoured Dubai Marina, Business Bay, Arabian Ranches and Dubai Hills Estate in Q3 2023.
Transactional sales prices for most popular areas for affordable apartments have seen increases of 9-15%, with the exception of Dubai Silicon Oasis, where average transaction prices dropped by about 2%. For affordable villas, the trend is similar with average transaction prices going up by 10-17% in the most popular areas. Notable exceptions have been recorded in The Springs and Dubailand, where transaction prices declined by 2% and 9%, respectively.
When it comes to luxury areas, most have experienced steady price appreciation of less than 5%, with the exception of Palm Jumeirah, where average transaction prices have continued to soar by 14-15%.
Based on data from the Dubai Land Department, there were 30,891 residential property (ready and off-plan) sales transactions valued at Dhs 96.6B in Q3 2023.
When it comes to ROI based on projected rental yields for apartments, certain areas including DIP, Liwan and Remraam have offered yields of up to 10%, a compelling story for investors. When it comes to luxury apartments, areas including Al Barari and Jumeirah Golf Estates have offered impressive returns of up to 8%, significantly higher than most global markets.
Bayut’s trends for ROI in villa communities also paint a positive picture. Buy-to-let villas and townhouses in JVC offer an average ROI of over 9%, a highly attractive proposition for potential investors. Areas such as International City and Town Square are also offering ROI percentages of over 7%. When it comes to luxury villas, Al Barari is another appealing option for investors with ROI of over 8%. The uniqueness of these homes and the limited supply in the market has helped to create niche demand for this area. Similarly, communities such as DAMAC Hills and The Sustainable City, which offer a host of facilities for families, offer healthy ROI of over 7%.
As recorded on Bayut, advertised rental prices in popular areas have also surged, with affordable apartment rentals in popular areas increasing by up to 11%. The cost of luxury apartment rentals has seen an upward trend of up to 13%. Areas with reasonably-priced villas have experienced price upticks of between 3% and 16%, while luxury villa rentals have increased by up to 21%.
Affordable accommodation seekers have focused on Jumeirah Village Circle (JVC) and Al Nahda for apartments. Those looking for villas have mainly considered DAMAC Hills 2 and Mirdif. In the luxury segment, Dubai Marina and Business Bay have remained popular options for apartment rentals, while Dubai Hills Estate and Arabian Ranches 3 are sought after for high-end villas.
When it comes to transactional rental prices, most increases in affordable neighbourhoods across villas and apartments have been fairly modest, staying well within 5%, with the exception of villas in JVC, where average transaction prices have gone up by over 8%. For luxury apartments, transaction prices for rent have remained fairly stable. For luxury villas, rents have gone up by 7-8% in areas such as Dubai Hills Estate and DAMAC Hills.
While historic trends have generally indicated a cool-off period for property market activity during the summer months, with many residents travelling overseas, activity during 2023 remained elevated even during the hottest months of July and August. The volume of transactions in the last three months alone came close to Dhs 100 billion, a number previously unheard of even over a full-year period.
While double-digit growth in rental transactions has become more sporadic, demand for rental units has continued to increase, especially in light of more people moving to the UAE for better career opportunities and a safer lifestyle.