2023 on track to become busiest year for property transactions

In comparison to the same period previous year, real estate transactions in Dubai increased by 44%, totaling 57,700 units

With over 57,000 units bought across Dubai during the first half of 2023, the residential sector is on track to becoming the busiest year on record, a new report finds.

Global real estate services provider Savills revealed in its latest report that property transactions during the period rose by 44 percent from its corresponding period last year to 57,700 units transacted. This included 46,100 apartments and 11,600 villas.

“Historically, the summer months in the UAE have been known to be slow as many residents travel during the school break. However, this trend seems to be changing in recent times as Dubai property continues to find favour among residents and international audiences looking for stability amid an uncertain economic environment,” said Swapnil Pillai, Associate Director of Middle East Research at Savills.

“Whilst it is still early to comment on the overall take-up during the usually slow summer period, early indicators suggest that market activity is likely to remain strong.”

In Q2 alone, 28,400 units were absorbed across the city, recording a year growth rate of 33 percent, with apartment units leading the way.

Off-plan remains strong

Buyer activity in the off-plan market segment showed strong growth, making up close to 53 percent of the units sold during the first half of the year.

The rise in demand for off-plan transactions, according to Savills, indicates buyer preference to delay committing to high lending rates in the current economic environment. It is also reflective of an increase in new project launches that have jumped to 27,900 units during the period, up from 24,900 units in H1 2022.

Property price growth steadies

Although property prices have continued to increase, the pace of growth has slowed slightly.

The double-digit price growth that was witnessed across nearly all micro-markets last year has started to slow in some locations with significant handovers and planned supply, Savills said.

Meanwhile, price growth across established locations with limited upcoming supply and lower vacancy levels remain relatively more sustained.

Apartments in Palm Jumeirah, one of Dubai’s most sought-after residential districts, witnessed one of the highest half-yearly price growths. On average, prices rose by 19 percent compared to H2 2022.

Dubai Marina and Downtown Dubai were among the other high-growth markets recorded, as unit prices grew 14 and 11 percent respectively.

Other emerging locations included Al Furjan (9 percent), Sports City (8 percent) and Town Square (5 percent). Although these areas have noted a marginal increase in prices, upcoming supply and existing vacancy levels may dent further growth.

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