The real estate market in Dubai shows a rapid increase in off-plan property sales. The real estate market in Dubai had shown a continuous increase in off-plan property sales, which is higher compared to the last two months of the year. It also noted that, compared to last year, owing to the demand, there has been an increase of 4.2 percent in off-plan property sales. This increase in the market is an indication that the country’s future economic prospects will undoubtedly get stronger in the coming future.
According to the report published by the leading real estate firm CBRE (Global Commercial Real Estate Services), the demand for property hit a record high in the first two months of 2023. The residential market in Dubai recorded 8,515 transactions in the month of February alone, a staggering 43.9 percent increase over the previous year. Together, January and February recorded 17,741 transactions.
The Growth of the Real Estate Market In Dubai
Studies show that investors prefer Dubai as their favorite real estate destination to invest in. The government of the country has made great efforts to secure the nation’s economy. One of the primary elements that affected the performance of Dubai’s real estate market in the year was the city’s strong economic foundation. Among the prominent initiatives taken by the government is the Golden Visa Program for foreign investors, which has attracted investments in infrastructure.
Dubai Marina, Downtown Dubai, Business Bay, Palm Jumeirah, and Jumeirah Village Circle were the top searched locations in February 2023 for apartments, while Dubai Hills Estate, Palm Jumeirah, Arabian Ranches, and Mohammed Bin Rashid City were the most desired areas to own or rent villas or townhouses.
The main attraction for investors to the market is the stability it maintains. Moreover, with the rise in rental rates and returns on investments in Dubai, foreign investors and residents are looking forward to new properties within the city. Since the shortage of affordable homes in the city increases, the demand and price levels are increasing, thereby raising the demand for off-plan properties.
The Head of Off-Plan Sales at Allsopp & Allsopp, Fintan Flannelly, noted that “we are seeing more and more developers come into the market, which is a clear indication that the industry is confident in the long-term prospects of Dubai’s economy.
Timely as undersupply looms, the market is hungry to see a healthy balance of demand and supply, which will ultimately benefit both buyers and developers.” The research also states that the average price per square foot for off-plan properties has been constant, just slightly rising by one percent compared to last year.
Industry insiders predicted that the Dubai real estate market would have a strong year in 2023. The city’s real estate market has been expanding gradually since the beginning of the year, with rises in prices and sales volume in all market categories.
The government’s adoption of several initiatives to assist businesses and individuals has helped to keep investors’ faith in the sector, thereby boosting the real estate market. The country has always attracted new citizens and businesses due to the various liberalizing social and economic reforms implemented in the past few years. The country offers provisions like remote worker visas and the legalization of 100 percent legal ownership for certain businesses.
In its 2023 Middle East Real Estate Market Outlook, CBRE, a real estate consultancy, said that the GCC economies will continue to record relatively strong growth rates in 2023. The data provided by real estate services indicates a considerable shift in property preferences for both owners and tenants. 59.4 percent of those who want to own a home are seeking an apartment, while 40.6 percent are interested in villas or townhouses.
On the rental market, 20 percent of tenants were looking for villas or townhouses, while 80 percent of tenants were looking for apartments. Besides, 65 percent of the tenants seeking apartments prefer furnished properties, while 33 percent are interested in unfurnished apartments. Out of those who can afford a villa or townhouse, 55 percent were looking for unfurnished units, while 44 percent were looking for furnished villas or townhouses.
As both existing and off-plan transactions recorded their highest performance in February 2023, investors are still interested in off-plan apartments. Last month, off-plan transactions accounted for 50 percent of the overall sales transactions and 41 percent of the total sales value.
Even beyond the real estate sector, Dubai’s economic prosperity is visible in daily life. Landlords are aware that there will always be tenants ready to pay their high rental rates as more and more people move to Dubai. Many property owners are taking advantage of the current market to make a profit from sales.