Welcome to Morgan's International Realty's Dubai Real Estate Market Overview for the first quarter of 2023. The following is a concise summary of the performance of the Dubai Real Estate market during Q1 2023. To access the Dubai Real Estate Market Report Q1 2023, kindly refer to the link provided at the conclusion of this article.
Dubai's real estate market exhibited remarkable growth during Q1 2023, defying global economic uncertainties. Transactions valued at AED 88.7 billion, involving 30,900 sales, were completed during the period, representing a 6% quarterly increase and a 50% year-on-year. The value of transactions increased by 8% quarter-on-quarter and 60% year-on-year.
During the first quarter, 15,905 primary market (off-plan) transactions were recorded, accounting for 51% of the market. This trend is in line with the increased pace at which developers are introducing new projects to meet growing demand. Transactions for under-construction properties increased by 85% YoY, while transactions for ready properties increased by 26%. Notably, the average price per sq. ft. for an under-construction property during the quarter was 40% higher than that of a ready property, a figure that warrants careful consideration. This statistic reflects the growing shift in demand, where buyers are seeking more than just a prime property in a prime location. The current trend is to seek a lifestyle beyond location, which has resulted in an increased number of prime properties launched by Dubai-based developers. Of particular note is the fast-growing niche of branded residences, where Dubai is currently the world capital for. Branded residences command a premium of 39% compared to non-branded residences, a figure that is quite close to the difference in price between an under-construction property and a ready one. The current market conditions, coupled with the developers growing aggression in the branded residence niche, may motivate speculators to enter a market that is experiencing massive gains. Consequently, it is crucial to closely monitor the number of listings in developments under construction, as it can serve as an indicator of speculative activity in the market.
Luxury properties in Dubai continue to thrive, registering an 8% volume increase QoQ and a 67% increase YoY for properties sold above the 10 million AED threshold, supported by a climate of economic uncertainty, that drives ultra-high net worth individuals to relocate to Dubai and call it their home. During the quarter, 92 transactions at a total value of 6.18 billion AED for prime property above the 10 million dollar threshold registered an increase of 35% QoQ and 94% YoY.