The year of 2022 showed positive dynamics both in the growth of real estate prices and rental prices in Dubai. Last year, the emirate’s residential rentals and transactions reached record highs against the background of high demand for real estate among investors from all over the world. Dubai is a popular destination for acquiring property due to its exceptional safety, business-friendly environment, broad investment possibilities and much more.
Real Estate Market Outcomes for 2022
In 2022, the real estate market in Dubai demonstrated a strong performance and property transactions reached a record high. As stated by a CBRE report, 90,881 real estate deals were registered in the emirate, which exceeds the historic record high in 2009 of 81,182 transactions.
Dubai property transactions topped AED 500B (USD 136B) in 2022, according to official statistics. Off-plan real estate sales saw a 92.5% rise and secondary sales showed a 32.4% jump. The end of last year also showed high indicators, with more than 8,500 deals registered in December alone, leading to a 63% rise compared to the previous year.
The most sought-after districts in the first part of the year were waterfront communities, including Palm Jumeirah. Real estate costs in this area rose largely due to high demand and low supply.
Note: Beachfront real estate in Dubai is a beneficial investment, because property by the sea is in a high demand among tourists. Several of the best projects in the emirate, which offer beach apartments, include Six Senses Residences, AVA by Omniyat and Emaar Mina Rashid.
A huge growth was demonstrated in green neighbourhoods such as, for example, Hadаeq Sheikh Mohammed Bin Rashid Part 2. Prices in this neighbourhood rose by 53% and approached AED 1,600,000 (USD 436,000) on average. This type of community attracts families with children who desire to live in destinations with canals and parks.
Property Prices in 2022
During 2022, the average prices for real estate increased by 9.5%. The cost of apartments rose by 9%, while villas increased by 12.8% during the same period. In December 2022, average apartment price in Dubai constituted AED 1,168 (USD 318) per sqft, and the average villa price was AED 1,385 (USD 377) per sqft.
The Jumeirah area registered the highest sales rate of AED 2,324 (USD 633) per sqft in the apartment segment of the market. The popular district of Palm Jumeirah also had the highest sales rate per square foot at AED 3,921 (USD 1,067) in the villa segment.
Rentals in 2022
According to CBRE, record levels were also registered in indicators of residential rental growth. In 2022, apartment and villa rental prices rose by 27.1% and 24.9% respectively. By the end of last year, the average annual rental price for apartments constituted AED 95,000 (USD 26,000), and the average rent for villas stood at AED 282,000 (USD 77,000).
Last year, the sought-after area of Palm Jumeirah reached the highest average annual rental rate. Rents here reached an average of AED 248,000 (USD 68,000) for apartments and AED 1,017,000 (ISD 277,000) for villas per annum.
Flow of Investors
Last year, about 80,216 investors registered 115,183 new property investments with a total value of AED 264.15B (USD 72B). In addition, the number of investors in 2022 increased by 53% compared to 2021.
The top non-resident buyers in 2022 were Russians with 15% of all transactions, followed by the British with 12% and Indians with 11%. Against the background of a massive geopolitical crisis across the world, the emirate saw the biggest inflow of private wealth. In the first half of 2022, over 16% of Russian entrepreneurs and companies moved to the UAE including Dubai. In addition, the local real estate market also benefited from Qatar’s Fifa 2022 World Cup. Dubai has the status of a ‘finance hub’ and the main tourist attraction of the region, due to which the emirate became the main beneficiary outside of Qatar.
Real Estate Market Forecasts for 2023
The emirate of Dubai remains one of the most sought-after investment destinations in the world. The main reasons for its popularity include a strong financial foundation and economy, as well as bright perspectives of growth.
The average rates of property prices and rental growth will be positive in Dubai in the current year, as anticipated by the CBRE. According to recent research, the booming property sector of the emirate will have further growth, and 2023 is set for a 46% growth. Experts expect 30,000–35,000 new housing units to be delivered in the current year.
Strategic Plan 2026, which will help to establish Dubai as one of the best property markets in the world, was announced earlier in 2023. The emirate will ensure new real estate solutions, promote innovation and create a data-driven sector for investment confidence. In addition, there will be a strong focus on implementing global standards in the property market.
Note: The emirate offers an attractive investment environment due to many reasons, including the encouragement of small and medium-sized enterprises and the flexibility of a business environment. Purchasing a property in Dubai is a good investment, due to high demand of housing among business specialists and entrepreneurs.
The emirate will remain attractive to foreign investors, which strive to protect their assets. Dubai will only strengthen its position against the background of the energy crisis and the geopolitical instability. Therefore, the demand for property will further increase in 2023.
An upward trend will be seen in the real estate market in Dubai in 2023 as experts predict that local prices will increase by at least 10–15%. The underestimated districts with low real estate prices will see enormous growth. For example, in 2022, the vibrant area of Jumeirah Village Triangle saw prices rise by 62%, while the average property costs reached AED 731,000 (USD 199,000). In the current year, the real estate prices in this district are anticipated to grow by 29%.
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