19 July 2023, Zawya
In Q2 2023, Dubai’s residential market saw a significant increase in sales volume and value.
Dubai residential market performance:
In Q2 2023, Dubai’s residential market saw a significant increase in sales volume and value, with over 30,000 property transactions and a total sales value of over AED 91 billion. This was by far Dubai’s best-performing Q2 on record, showing a 35% increase in transactions and a 54% increase in sales value compared to Q2 2022.
Apartments experienced a surge in demand, with the median price per square foot reaching AED 1,336, the highest on record for Q2. Off-plan villa prices also saw a rapid rise, increasing by 32% compared to Q2 2022, largely due to increased interest in luxury villa communities and attractive post-handover payment plans offered by developers.
Affordability has also driven demand in emerging locations. Dubai Marina was the top-selling area for ready properties, while Jumeirah Village Circle led in off-plan sales. Damac Lagoons led the off-plan villa market sales, with 642 transactions valued at AED 1.8B.
Prime market demand
Dubai’s prime real estate market is flourishing, positioning the city as a luxury destination on par with established global markets. The Palm Jumeirah, Emirates Hills, and Jumeirah Bay Island are attracting relentless demand from ultra-high-net-worth individuals (UHNWI) and solidifying Dubai’s status as a top choice for second homes.
With average transacted prices around AED 3,360 per square foot (approximately US$915 per square foot), Dubai maintains its position as one of the world’s most affordable luxury home markets. Last year, Dubai experienced a record-breaking 44% surge in prime home prices, the highest globally. The market’s growth continues with a 16% increase in Q1 and an annualized growth rate of 54.6%.
Dubai’s ultra-prime real estate market is thriving, with the most expensive sold apartments being in Bulgari Lighthouse, Island 2, which sold for AED 137M. The top five areas with the most expensive sold villas included Emirate Living, which sold a villa for AED 150M.
Luxury home sales move Dubai into Global Top 5
Dubai has cemented its position as one of the busiest luxury residential markets globally. With US$1 million, buyers can secure approximately 1,130 square feet of prime residential space in Dubai, three times more than in London, New York, or Singapore. This affordability, coupled with Dubai’s exceptional real estate offerings, has fueled demand among wealthy individuals.
In 2022, Dubai ranked as the fourth most active luxury market, with 219 homes priced above US$10 million sold for a total of US$3.8 billion, trailing behind London, LA, and New York. Dubai also ranks fifth for sales of homes priced above US$25 million.
Luxury home launches remain limited
Dubai’s prime real estate market is experiencing a supply-demand imbalance, driving substantial price growth. New project launches have been limited, leading to a scarcity of supply. However, this trend is starting to shift, with new apartment launches on the rise in prime submarkets like the Palm Jumeirah. By 2025, a total of 289 homes are expected to be delivered, with 54% being villas. Notable projects include Alpago’s Palm Flower, Ellington Beach House, Bvlgari Mansions, and Sur La Mer. Ongoing villa construction projects in Damac Lagoons and Tilal Al Ghaf are adding to the upcoming market inventory.
Dubai’s prime residential market has emerged as the fastest-growing globally, driven by its safe-haven status, the influx of diverse international ultra-high-net-worth individuals, and the government’s effective response to the pandemic. Despite potential risks tied to global economic conditions, Dubai’s safe-haven reputation reinforces its appeal in uncertain times.
Soliman Hossameldin, Marketing Manager of Property Shop Investment, comments, “The prevailing market conditions, coupled with a consistent and sustainable growth trajectory, are fostering a sense of confidence among homeowners and investors alike. The record-breaking performance we’ve seen in Q2 2023 is a testament to the robustness and resilience of Dubai’s real estate market.”
About Property Shop Investment (PSI)
Property Shop Investment (PSI), a pioneering force in the UAE’s real estate industry, was established in 2007 and has since been on a relentless pursuit of reshaping the industry and delivering unparalleled value to its clients. Our vast range of comprehensive services, commitment to innovation, and exceptional team of over 200 experts uniquely position us as the top real estate broker in Dubai.