Many people call Dubai the city of the future, and rightly so. Dubai is one of the most spectacular places in the world. Millions of people visit Dubai every year or move here to settle down. Naturally, the real estate market in Dubai is booming, with developers prioritising the construction of luxury properties. Today a number of investors and guests of the city are keen to gain an insight on price trends on Dubai's housing market in 2023. Read here about our Dubai real estate forecast.
Performance of the Real Estate Market in 2022
As demonstrated by the statistics, property prices in Dubai had increased perceptibly by the end of 2022. However, they didn’t reach the peak achieved in 2014. Since January 2022 flat prices have risen by 8.5%, while villas have become 13% more expensive. The average price of a square metre equalled AED 12,354 in the case of flats and AED 14,612 in the case of villas.
Jumeirah district offers the most expensive flats, while the costliest villas are on the island of Palm Jumeirah. For example, one of the biggest deals on Dubai's property market was concluded in September 2022, with a plot bought on the famous paradise island for AED 600 million. Two weeks previously the most expensive villa was purchased in Dubai for AED 302 million.
Such transactions prove that potential buyers are not held back even by significant increases in property prices. This is attributable to exclusivity – as such offers are rare, demand is high. In addition, the prospect of a golden visa is attracting a significant inflow of wealthy investors. As a rule, foreigners buy high-end properties in the UAE. Some acquire them to get permanent residence and others to let the properties.
You can earn good rental income. For example, a villa bought recently on Palm Jumeirah was let for AED 4,000,000 for six months. The rental income, if annualised, is a new record in Dubai. A villa in Emirates Hill held the previous record of AED 7,500,000 AED in annual rental income in 2021.
Flats, which are more affordable, have also been in great demand. Furthermore, sales reached an all-time high in 2022, stimulated by significant rent increases. The peak was reached in August, when the average rent price surged by 24.9% compared to the start of the year.
In the same period Dubai’s luxury real estate rental market experienced similar trends. The cost of renting villas rose by 24.2%. In the remaining months of the year there were no significant price increases in the real estate rental sector.
Dubai Property Market Forecast for 2023
It is anticipated that real estate prices in Dubai will continue rising in 2023. The introduction of the golden visa is one of the reasons. The visa enables expats to enjoy various benefits in one of the world’s most flourishing cities. Experts forecast a 20% increase in average property prices during the year, with the cost per square metre for high-end housing rising by 13.5% in 2023. Notwithstanding the high level of price increases, demand for luxury real estate will remain high.
According to the real estate consultancy Knight Frank, the Dubai property market will record the biggest price growth rates in the world in 2023. According to the experts, the city will even outperform the current leaders Miami and Paris. By the end of 2023 the cost of prime real estate is expected to increase by 50% compared to 2021. However, luxury housing in Dubai is still more affordable than anywhere else in the world, even with the massive price growth rates.
Photo: rawpixel.com (Freepik)
Flat prices will rise by 20% in 2023. It is highly likely that this is due to high demand for housing and rent increases. Against the backdrop of global economic instability, more and more foreign citizens will move to Dubai. The UAE government is promoting such immigration: today almost any foreign citizen will find it easy to get a residence permit here. Naturally, this all has a positive impact on the country’s economy.
According to the forecasts of the Central Bank of the UAE, the country will register economic growth of up to 3.9%. At the same time, the key sectors for the UAE economy won’t change: tourism, real estate, hospitality and transport.
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In a Nutshell
Dubai’s property market attracts millions of buyers every year. Sales peaked in 2022, despite the surge in real estate prices. The number of closed deals increased considerably compared to 2021. This trend can be attributed to several factors: simplified visa rules, an increase in rent, and global instability.
Leading experts agree in their real estate market forecasts that property prices in Dubai will continue to rise in 2023. The increase could reach 20% on average. Taking everything into account, now is the best time to buy property in the UAE. By the end of the year prices will be even higher.
Cover photo: rawpixel.com (Freepik)
