Written by Laura Adams, Director of Sales, Provident Estate

As expected, Q1 of 2023 has seen a significant increase in sales in both the off plan and secondary market. The majority of investors, up to 80% in most areas, are buying from outside of the UAE. The main investment has been from Russia, United Kingdom, India, Germany, France, USA, Pakistan, Lebanon, Canada and Romania.

The contributing factors to the increasing sales are endless – resident visas, tax free and safety are frequent appeals to the Emirates, and for now, there is no indication of showing a slow down any time soon. It is important to note that, although prices are rising, they are still 10.6% lower than the markets last peak in Q1 2015, as shown below.

The market in numbers: Total Sales Transactions, Total Value, Average Sale, Price per sq ft – Residential

Q1 – 2021 – 9,452 – AED18,639,850,815 – AED1,972,054 – AED1,032

Q1 – 2022 – 17,776 – AED41,645,928,042 – AED2,342,818 – AED1,296

Q1 – 2023 – 27,894 – AED68,942,621,109 – AED2,471,693 – AED1,482

The average sale price has increase from 2021 – 2023, in the same period by 25.3%, the number of transactions have increase in the same period by 194%.

Resale market

Since the pandemic and the changes in visa rules, many residents in Dubai have decided to purchase their home instead of renting, this shows in the hike of prices of Villas and Townhouses. Many of the ‘ready’ villas are tenanted, so the supply is low which is pushing the prices up even higher. Handover of projects such as Tilal Al Ghaf, Cherrywoods and Damac Lagoons are in demand due to them being vacant and we will see a high demand for end users in these projects. Apartment, premiums, especially on the beachfront, Palm and now Downtown, are the largest within 6 months to completion.

Total secondary transactions (ready properties)

Q1 2023 – 12,755
Q1 2022 – 9,862
Q1 2021 – 6,309

We see a 102% increase from Q1 2021 – Q1 2023

Off-plan

2023 has seen some amazing launches so far with more in the pipeline, from luxury to affordable, all projects are selling out in a matter of minutes.

Q1 2023 – 15,139
Q1 2022 – 7,914
Q1 2021 – 3,143

We see a 381% increase from Q1 2021 – Q1 2023

Under a million to the most expensive transfer

In the first Quarter 4,794 ready properties were transferred under for AED1,000,000, which was 37.59% of all sales and 5,518 properties of, off plan sales, a quarter of all transactions. Dubai is now a proven market for anyone looking to start property investments not just the 1%.

The most expensive transfer in this time period was a 9 bedroom apartment in Bulgari Lighthouse on Jumeirah Bay Island for a staggering AED410,000,000. This was an initial sale direct from the Developer.

Long Term Leasing and Returns As widely reported, rents have been increasing in many areas across Dubai. Below you can see how that has affected the ‘ROI’ on . Please note these are gross ROI’s (excluding service charges) and are calculated on this years average sale and rental prices from January 1st 2023.

Studio Apartment – Average sale: AED792,790 – Average Rent: AED62,288 – Average ROI: 7.8%

One Bedroom Apartment – Average sale: AED1,272,106 – Average Rent: AED82,948 – Average ROI: 6.5%

Two Bedroom Apartment – Average sale: AED2,163,962 – Average Rent: AED128,107 – Average ROI: 5.9%

Three Bedroom Apartment – Average sale: AED3,195,268 – Average Rent: AED177,657 – Average ROI: 5.6%

Demand – Search trends

2023 – Dubai Residential Apartments – Vacant, Furnished, Payment Plan, Sea View Areas – Dubai Marina, Downtown, , , JVCVillas/Townhouses – Corner Unit, Upgraded, Vacant, Pool Areas – Dubai Hills Estate, Palm Jumeirah, , Damac Hills, MBRC

Supply

Below is the total number of registered projects released to date, and some of the areas covered.

2023 – 21,871 apartments, 1,624 villas, 4,660 townhouses – areas Al Furjan, Arjan, Business Bay, Downtown, Creek Harbour, Dubai Hills, MBRC

2024 – 71,870 apartments, 4,014 villas, 7,646 townhouses – areas Al Barari, Al Furjan, Al Wasl, Arabian Ranches 3, Business Bay, Damac Hills 2, Dubai Hills Estate, Dubai Marina, Creek Harbour

2025 – 21,032 apartments, 2,315 villas, 9,877 townhouses – areas Al Furjan, , Arjan, Business Bay, City Walk, Damac Lagoons, Creek Harbour, Downtown

2026 – 17,867 apartments, 552 vilas, 3,375 townhouses – areas Arabian Ranches 3, Al Wasl, Business Bay, Damac Lagoons, Downtown, Creek Harbour, Dubai Hills Estate, Dubai Marina, JLT

2027 – 3,301 apartments, 0 villas, 0 townhouses – areas Bluewater Island, Creek Harbour, Design District, Dubai Hills Estate, Business Bay.

Side Note: So the next question is, how long will this last? the above shows the rebalancing of demand and supply, and with the above reasons in the start of this report I am quite confident in speculating that investing in real estate in the Emirate of Dubai will not end anytime soon. The ongoing changes globally is attracting a more diverse investor to the Region, along with people relocating their businesses and families for tax, safety reasons. The Dubai market is still very young and all signals are that we are in for a great future. Price per sq ft, lifestyle is unmatchable.