A steady increase in demand for housing, increased sales, growing prices, positive forecasts and ambitious plans for the future are the new reality of the Dubai real estate market at the beginning of 2023.
Influx of Expats
In the summer of 2021, the UAE was one of the most vaccinated countries in the world: in Dubai alone, 2.3 million people – i.e. 83% of the population – had received at least one dose of the COVID-19 vaccine. The UAE also had one of the lowest COVID-19 mortality rates in the world.
By the end of June 2021, Dubai allowed entry to the emirate for local citizens and then, for international tourists. 10.12 million visitors crossed the border between January and September 2022, compared to 3.85 million during the same period of 2021.
This was when the flow of expats began to grow, eventually tripling in 2022. Entrepreneurs, investors, and company managers came to Dubai, attracted by the high level of comfort and security as well as by favourable tax legislation and new investment projects.
Millionaires Move to Dubai
At present, Dubai accommodates 67,900 HNWI (people with fortunes from $1 million to $30 million) and 13 UHNWI (people whose assets exceed $30 million). Henley & Partners analysts believe that Dubai will be one of the 20 wealthiest cities in the world by 2030.
A recent survey of expatriate residential locations conducted by InterNations showed that the UAE ranks first in the world in 11 items out of 17. Those items include salary, housing, bureaucracy, security, medicine and others.
Real Estate Sales Growth
According to Dubai Land Department data for November 2022, the volume of real estate sales increased by 76% compared to the prior year. The number of transactions surpassed the previous record seen in 2011, with 10,941 sales in November alone.
The total value of real estate sold during that period increased by 71% compared to November of the prior year and amounted to 30.5 billion AED ($8.304 billion). At the same time, the number of transactions worth over 100 million AED ($27 million) increased by almost 50%.
Real Estate Is Snapped Up Quickly
These growth rates motivate buyers to make a decision quickly. For example, in December 2022, all residential lots in the new Elitz project from Danube Properties which comprised 268 studios, 281 apartments with up to three bedrooms, and four duplexes, were purchased within the first day of sales.
However, this is not the most impressive pace. This June, the new Beachfront Emaar tower from Emaar Properties with a total of 250 apartments sold out less than a minute after entering the market.
Acute Shortage of Waterfront Land Plots
The most popular kind of property in Dubai is waterfront land plots suitable for construction. There are only a few coastal sites available in the prestigious areas of the emirate but they are no longer on the market.
In 2022, the largest real estate sale in Dubai was the sale of a 100,000 square metre waterfront plot in Dubai Marina for a record amount of 690 million AED ($187.6 million). The owners plan to use the plot for the construction of ultra-luxury apartments and penthouses with a total living area of about 158,000 square metres.
Six Senses Residences (Housearch)
A Crystal Skyscraper
Taking into account the high level of demand within the market, real estate developers have begun to announce ambitious projects.
Binghatti partnered with the Jacob & Co brand (watches and jewellery) for the construction of a skyscraper in Dubai. The building will become the tallest residential house in the world snatching the title from the Central Park Tower in New York whose height is 472.4 metres. The top of Burj Binghatti Jacob & Co Residences tower will be decorated with huge crystals reminiscent of the brand’s famous diamond-encrusted watch.
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In a Nutshell
The Dubai real estate market tempts investors with favourable forecasts and good news. A breakthrough year in 2022 has given way to 2023, which promises to be a year of investment growth, large-scale construction and interesting projects.
Cover photo: Peninsula Four (Housearch)
