The UAE’s real estate market, and Dubai in particular, had a particularly active year. Records regularly decreased when prices and transactions rose during the strong economic recovery that followed the COVID-19 epidemic, as well as during Expo 2020 Dubai and the subsequent 2022 FIFA World Cup. Notwithstanding the current state of the world economy, high-net-worth individuals have flocked to the UAE over the past 18 months. According to real estate agents in Dubai, this has helped the luxury industry, which is expected to grow by 22% over the next five years. After recording 89000 sales transactions as of November 2022, up from 61000 deals in 2021, the Dubai real estate market is expected to enjoy a record-breaking year in 2023. This represents a significant gain of 46% over the previous year and a 38% increase over the 2013 market peak.
Forecast For The Dubai Real Estate Industry In 2023
In 2023, property prices are expected to increase by an average of up to 20%, according to the most current data compiled by our Dubai property company, with the luxury market expected to continue to dominate with a growth rate of 13.5%. The supply is the other essential component in the 2023 perspective, according to the most recent news on Dubai real estate for all those who are looking for properties for sale in Dubai. A clear demand-supply imbalance and a strong economic environment underpin the 13.5 per cent prime residential prediction for 2023, as developers have not increased supply in response to the demand boom as they have in prior cycles. In fact, it is anticipated that the UAE would have one of the economies with the fastest growth rates by the end of 2023. A return to steady and sustainable growth will inspire confidence in investors and homeowners alike.
Palm Jumeirah experienced the most price increase of 5% in Dubai’s flat and commercial leasing sector. Similarly to this, Downtown Dubai had the highest occupancy rates for rental apartments at 4.4%. Dubai Marina, Jumeirah, and JBR are anticipated to be the major rental real estate markets in 2023, in addition to the aforementioned locations. You can seek top mortgage services in Dubai to help you in your venture to invest in Dubai properties. The success of the Dubai real estate market has been attributed to a variety of factors, including Dubai’s standing as a leading tourist destination, altered governmental policies, lowered visa requirements, and an expat-friendly climate. Yet, they will help the industry succeed in 2023.
Would rents decrease in 2023?
Dubai will experience rent rises in 2023, especially in the most sought-after areas where supply is insufficient to meet demand. However, areas with lower rates are expected to have a minor rental increase. Since 2014, the emirate’s rental rates have been declining. Nonetheless, they started to increase as more foreign workers started to return following the pandemic. As the job market improved, high-net-worth individuals flooded the market. As long as there remains a shortage of supply in the primary market, rentals for flats in Dubai will definitely keep going up. Due to this, we anticipate a small increase in rental growth in this market area. Most of the new supply is moving to regions with more easily accessible and fairly priced flat structures.
Future Real Estate Growth
Future growth will primarily be fueled by China. While Chinese investment in Dubai was growing at its fastest rate about three years ago, the market saw a slight downturn. We believe that this bottleneck will soon break, helping the Dubai market as a result.
As gaming is introduced in the area, a new population is anticipated to relocate to Dubai, adding a new demographic to the mix of demand. Finally, as rent prices continue to climb at their fastest rate and banks continue to offer personal loans, more people are choosing to buy real estate, which is increasing demand once more. It will be interesting to see data on mortgage numbers at the end of the year given that borrowing rates are constantly rising and the three-month Emirates Interbank Offered Rate, or EIBOR, has reached 3.8%.
Briefly put, 2022 has advanced swiftly with strong sales in a variety of property types, including studio apartments for investors and large golf courses or seafront properties for owner-occupiers. We predict a similar tendency to continue in 2023 given the current stock deficit we find for villas or high-quality flats with beach views. Despite the launch of new villa developers, there will be a significant shortage of finished villas which they take three to five years to deliver.