12 April 2023, Arabian Business
Demand for affordable and mid-range properties drives growth in Dubai’s real estate market.
Dubai’s property market hit a new peak in the January-March quarter of 2023, with real estate transactions reaching over $24 billion (AED88.73 billion), posting a whopping 60 percent jump over the same year-ago period, according to the latest industry data.
Importantly, Dubai’s real estate market is expected to see more highs in the coming months, with industry insiders predicting a 10-12 percent surge in the next two quarters.
“Rising demand for affordable and mid-range properties in the wake of a shift in buyer preferences towards properties that offer value for money, coupled with the continued availability of affordable financing options will drive further growth in Dubai’s real estate market in the coming months,” Adil Akhtar, CEO and founder of Foremen Fiefdom, Dubai’s leading real estate investment firm, told Arabian Business.
“The industry expectation based on the current trend is that the real estate market [in Dubai] is poised to grow by 10-12 percent in the next two quarters,” Akhtar said.
Robust growth in Dubai’s real estate market
Other industry insiders in Dubai also said the robust growth in the first quarter of 2023 is expected to continue throughout the year, which is a positive indication of the health of the real estate market in the UAE.
Akhtar said the industry data for the first quarter also showed that demand for off-plan residential assets were particularly robust, with a surge in demand for villas, townhouses, and apartments.
Sales of villas and townhouses increased by 35.5 percent, while apartment sales rose by 12.4 percent, indicating the continued high demand for residential properties during this period, Akhtar said.
“The strong performance of the off-plan residential sector is a testament to the attractiveness of the market to investors, and suggests that there is significant potential for further growth in the real estate market,” he said.
Kind of real estate assets more in demand currently
Akhtar said the current trend in the industry shows that there is a growing demand for real estate assets that provide more space and privacy, such as villas and townhouses.
“This is due to a shift in priorities caused by the Covid-19 pandemic, as people are now placing greater importance on having their own space to work, study, and relax,” he said.
Akhtar said properties priced between AED500,000 and AED1 million are quite popular among buyers, indicating that there is a demand for reasonably priced properties.
“Overall, the current demand for real estate assets is focused on larger properties that provide more space and privacy, such as villas and townhouses,” he said.
Akhtar, however, said he also expects to see a spike in the number of launches of affordable housing projects to meet the growing demand for affordable properties over the next few months.
These projects are expected to cater to the needs of buyers looking for reasonably priced options, particularly in the mid-range segment, he said.
“As we look ahead to the next two quarters of 2023, there are several factors that suggest continued growth for the real estate industry in the UAE.
“However, one key trend that is expected to continue is the demand for larger properties with more space, particularly in suburban and outer-city areas,” Akhtar said.