Escalating Prices of Apartments and Villas Driving Dubai Real Estate To Growth

With economic conditions suggesting turmoil in real estate markets across most of the world, the situation is completely different in Dubai real estate market. Following the legacy set by 2021, the current year has experienced a hefty increase in the prices of properties in Dubai along with a significant spike in demand. The picture painted by the official data released by Dubai Land Department (DLD) depicts that both the values and volume reach an all-time high record.

Dubai – The future city

Though the entire economic sector of the United Arab Emirates exhibiting positivity but Dubai – the future city accounts for much of this growth. More precisely, Dubai real estate is the star performer that has added the most to this growth grit?in terms of volume and value. With a large proportion of Dubai real estate continuing to be sold in the luxury segment located in prime areas,?robust demand conduces the launch of luxury projects in Dubai.

It is an important factor to consider that this growth in terms of value and volume is here to stay, because a lot of appreciation in Dubai real estate sector is to come ahead in 2023 and many more years.

FIFA World Cup Qatar highlighted Dubai real estate

Dubai is one of the most renowned cities around the world that hardly needs an introduction. The FIFA World Cup held in Qatar has brought global attention to the dream city – Dubai and its spectacular real estate sector. The global spectators visiting Qatar to support their favourite teams staying in Dubai and these?FIFA World Cup fans are partying on the princely sands of Dubai.

Dubai real estate market is open, brimming with golden opportunities and available for everyone to invest. The best of all is that it is growing rapidly in terms of values. In October 2022, the average prices of properties for sale in Dubai increased by 9.2 per cent on a year-on-year basis. The prices for villas for sale are increasing at 13 per cent and?apartments for sale in Dubai?at 8.5 per cent. According to a report issued by CBRE, a global commercial real estate service provider, the total transaction volumes reached 71,412, which is the highest total recorded since 2009.

FIFA World Cup visitors are showing high interest in Dubai real estate?sector and these statistics strengthen their faith in this market.

The highest market growth since 2009

According to this report, the average prices of residential properties in Dubai increased by 9.2%, which shows that the prices of apartments for sale in Dubai increased by 8.5 per cent and prices of?villas for sale in Dubai?increased by 13 per cent. The average price for apartments in Dubai reached AED1,149 per sq. ft. and the average price for villas in Dubai touched AED1,359 per sq. ft.

Though these prices are higher as compared to the values of 2009 but are still 22.8 per cent and 6 per cent below the peak values recorded in 2014 for apartments and villas respectively.

The changing dynamics of Dubai real estate

It is evident that Dubai real estate market continues to flourish at a record high level and?rental costs continue to soar as Dubai real estate market heats up. The trend is confirmed by the data extracted from the Dubai Real Estate Regulatory Agency’s (RERA) online registration system – Ejari. It shows that the number of new contracts registered on a year-on-year basis this year fell by roughly 4.7 per cent. However, the property renewals have increased by 33.6 per cent indicating that the tenants are not willing to move or find another apartment – given the current market condition.

Though the?property agents in Dubai?are of the view that the rental market condition will start tapering off by the mid of 2023 but the growth trajectory of the Dubai real estate market depicts a different story.

When it comes to the best performing areas, Jumeirah remains the most expensive neighbourhood for apartments in Dubai, with an average price of AED2,226 per sq. ft. And Palm Jumeirah remains the most expensive area for villas in Dubai with an average price of AED3,704?per sq. ft.

Dubai – A playground for high-net-worth individuals

The escalating interest of local and foreign wealthy property buyers has made Dubai a perpetual playground for high-net-worth individuals. In the pursuit of a safe and luxurious lifestyle, more than 2,000 millionaires moved to Dubai in 2021 alone. In 2022,?Dubai prime areas are in higher demand with property prices up by 90%, which did not discourage the passion of these potential buyers. Dubai’s luxury real estate continues to be one of the most favourite investment segments for wealthy investors.

According to a recent report published by Knight Frank, real estate experts forecast a price growth of 13.5 per cent in 2023. While the price growth is expected to rise by 2 per cent on average across the major real estate markets in the world. This will be the strongest price growth across the globe, as cities like Miami, New York, Paris, and Singapore will only achieve single-digit growth.

According to Knight Frank’s 2023 Prime Predictions, prime residential areas include the neighbourhoods of Al Furjan, Palm Jumeirah, Jumeirah Bay Island and Emirates Hills, where it is expected to see a rise of 13.5% in property prices in 2023.

Due to Dubai’s status as a safe haven, ultra-high-net-worth individuals from several countries are looking for luxurious second homes in Dubai. The UAE government’s exemplary reaction to the pandemic, which has boosted investors’ confidence, values of prime properties for sale are being fuelled.

Another attractive feature of Dubai real estate is its affordability. With prime houses selling for roughly $800 per square foot, Dubai is one of the world’s most ‘affordable and pocket-friendly’ luxury residential marketplaces, which adds to the city’s attraction.