#Report: Dubai Real Estate Market Q1 2023

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.


Are real estate prices dropping in Dubai?

It is worth noting that hotel apartments and office/retail spaces have been experiencing slower price growth compared to other property types since the end of the Covid 19 pandemic restrictions , partly due to the value-added tax that is chargeable upon purchase. However, during the first quarter, these property types witnessed significant price increases, with hotel apartments seeing a 9% increase and office/retail spaces seeing an 18% increase when compared to the previous quarter. This trend is expected, as the overall real estate market in Dubai continues to grow.
Mortgage transactions remained stable QoQ, as residents choosing to buy rather than rent, supported by offers from local banks. When compared YoY, mortgage volumes were 17% higher during Q1 2023.

What are the trends in the Dubai property market during the first quarter of 2023?

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 Property Market in Dubai

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.

During the quarter, the Dubai real estate market witnessed a record-breaking transaction for the most expensive apartment ever sold in the city. The transaction involved the sale of an ultra-luxury penthouse in the newly launched Bulgari Lighthouse, covering an area of 38,970 square feet, and commanding a price tag of a whopping 410 million AED ($111 million). This remarkable milestone firmly establishes Dubai as one of the few cities in the world that transacts apartments above the 100 million dollars threshold. Jumeirah Bay, home to Bulgari Residences, boasts the highest price per sq.ft in Dubai, sitting at an all-time high of 10,571 AED (2,878 USD). The office and retail property volumes observed a 20% increase compared to the previous quarter, and the figures are 34% higher than those of last year, as business and economic climate continues to strive. 
Source : Research Team