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As Per Survey Results By Worldwide Real Estate Services Providers, 46,100 Flats, And 11,600 Villas Were Sold In H1 2023
The ongoing year is poised to be the most active period for Dubai’s residential real estate sector. Spurred by a remarkable half-year record of 57,700 property transactions encompassing both apartments and villas. This reflects a substantial 44 percent increase. In the first half of 2023, a survey by Savills revealed 46,100 apartments and 11,600 villas sold. That is the highest volume recorded for a half-year period. Comparing this to the five-year average, activity levels have surged by an impressive 209 percent during this current timeframe.
Remarkably, the Dubai Lands Department highlights the real estate sector, which encompasses commercial properties as well. Experienced its highest-ever semi-annual sales in the first half of 2023, boasting 60,440 transactions amounting to Dh177.3 billion.
Swapnil Pillai, the associate director of Middle East Research at Savills, noted a shift in the historical summer slowdown trend in the UAE. He attributed this change to the persistent appeal of Dubai’s property market to both residents and international investors. That is seeking stability in an uncertain economic landscape. He observed that while it is still early to assess the traditionally sluggish summer period, initial indicators suggest a sustained market vitality. During Q2, the city absorbed 28,400 units. Witnessing a significant 33 percent annual growth, primarily driven by apartment unit transactions.
Savills’ research underscores the resilience of the off-plan segment, which comprised almost 53 percent of the total units sold. This inclination toward off-plan transactions is indicative of buyers’ inclination to delay committing to higher lending rates in the current economic context. Pillai also highlighted a surge in new project launches. Totaling 27,900 units in H1 2023 compared to 24,900 units for the entire 2022.
JLL’s Q2 Market Overview report revealed a year-on-year increase of 38 percent in value and 30 percent in volume for off-plan residential sales in Dubai. In Abu Dhabi, the value of off-plan transactions more than doubled from Dh1.8 billion to Dh3.8 billion. In Dubai, the majority (57 percent) of these transactions fell within the Dh500,000 to Dh2.0 million range. With investors primarily focusing on studios and 1BR units in areas such as Jumeirah Village Circle (JVC), Dubailand, and Mohammed Bin Rashid (MBR) City.
Kamco Invest’s survey highlighted that driven by Dubai’s robust real estate sector, property sale transaction value across the GCC surged by 9.9 percent to $90.7 billion year-on-year in H1 2023. Dubai’s property transactions contributed 54 percent of the region’s total transacted value, offsetting declines in other key markets like Saudi Arabia, Qatar, and Kuwait.
Savills’ report emphasized that the bulk of off-plan transactions were observed in the apartment category. While villa and townhouse developments were preferred for ready units. Notably, 67 percent of villa and townhouse transactions during H1 were for ready units. Popular locations for ready villa units included Damac Hills 2, Al Furjan, and Dubai Hills Estate.
The report from Savills also pointed out that while asset prices continue their upward trajectory, the pace of growth has slightly moderated. Double-digit price growth, prevalent throughout most micro-markets in 2022, has started to slow in areas with significant handovers and planned supply. Nonetheless, established locations with limited upcoming supply and lower vacancy levels have maintained relatively sustained price growth.
