Category: News

A recent market study highlights that studios, 1-bedroom, and 2-bedroom apartments are favored choices among investors in Dubai’s real estate market. Property prices have witnessed a substantial 14-15 percent increase from mid-2022 to mid-2023.

According to a study on investment trends, investments in Dubai apartments typically yield an annual rental return of 7-8 percent, and it takes around 8 years for the investment to pay off. However, considering property appreciation during this period, the payback period may reduce significantly, as outlined in data compiled by Colife, a UAE-based rental co-living and property management service.

The study emphasized that Dubai’s average rental yield ranges from 5-7 percent, reaching up to 11 percent for properties with high liquidity. With property values rising annually, the payback period is expected to decrease.

As an illustrative example, Colife shared the case of an investor who acquired a studio in Al Furjan for $122,110 in December 2022, yielding a 10.7 percent annual return.

Colife’s study provides valuable insights into the investment potential in Dubai, emphasizing the city’s appeal to international investors. It mentions that Brits, Indians, and Chinese buyers lead the pack of international investors in Dubai, according to consulting company Knight Frank.

The study revealed that, based on customer requests, studios, 1-bedroom, and 2-bedroom apartments are preferred choices for residential investments in Dubai. Prospective tenants prioritize utilities included in rent (47.6 percent), convenient locations (42.8 percent), 24/7 free service (4.7 percent), and community events (4.7 percent).

When choosing a neighborhood for real estate investment in Dubai, the study recommends focusing on specific towers within districts, considering factors like infrastructure, ventilation, and elevator performance. Popular areas among rental clients include Dubai Hills, The Greens, Creek, and JLT.

The study also addressed the off-plan vs. resale dilemma, noting that many investors prefer resale properties for immediate rental income. While off-plan properties may be considered for potential profits, their value can fluctuate during construction or completion.

Average prices for a studio in Dubai hover around $260,000, translating to roughly $3,000 per square meter. The study advises investors to specify a preferred starting price to aim for a high return on investment.

Rental prices have witnessed an 8-10 percent average increase in Dubai since the beginning of 2023, with a significant 30 percent rise in short-term rental prices. The study anticipates continued growth in both property prices and rentals, driven by Dubai’s economic expansion plans and the influx of global companies and skilled professionals to the city.

  

Publish Date: 16 Nov 2023

Source: https://www.arabianbusiness.com/industries/real-estate/dubai-real-estate-how-much-money-do-landlords-make-on-property/

 
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Dubai’s real estate market has demonstrated resilience with a 46 percent surge in transactions and a 37 percent increase in value, as indicated by a recent study.

A delay between purchases and registrations, coupled with a decrease in new launches during the summer, has led to a significant perceived drop in off-plan registrations in recent months.

The sudden and sharp decline in off-plan transactions in Dubai during September-October is attributed to a combination of factors: a 2-3 month lag in house purchases and their registration with the Dubai Land Department (DLD), along with a reduction in new project launches during the summer. This insight was revealed by a new study conducted by Realiste, a leading AI-based proptech.

Contrary to concerns about a downward trend in the market, the real estate sector in the city remains robust. Research by Realiste, based on data directly sourced from developers in Dubai through integrated CRM systems, highlighted the substantial surge in transactions and value registered in September-October this year compared to 2022.

Reports citing DLD data raised worries about a 65 percent decrease in off-plan registered sales from September to October, hinting at the end of the prosperous market, as per several quarters.

Realiste’s AI study, drawing insights from over 300 Excel sheets of data received daily from Dubai’s developers, shed light on the market conditions.

The study emphasized that the perceived collapse is not an indicator of an imminent market downfall but rather a result of temporal inconsistencies and deliberate reduction in summer project launches.

The 65 percent decline in off-plan sales observed is influenced by the time lag between deal and registration, averaging 2-3 months, and a significant reduction in summer project launches. This discrepancy reveals the true complexity of market data, as indicated by Realiste.

The report highlighted that the observed data in September and October actually represents transactions completed, on average, in June, July, and August, showcasing the temporal inconsistency.

Furthermore, this year’s summer season witnessed a substantial reduction in project launches compared to 2022, leading to a scarcity in supply. This scarcity accelerated sell-outs and redefined market dynamics, contributing to the perceived dip in off-plan sales.

Despite the reported dip, the study reaffirmed Dubai’s reputation for resilience and rapid development in its real estate market.

The data depicted a steady rise in bookings, indicating ongoing vitality in the market. It also pointed out the unique market conditions where the primary market surpasses the secondary market in size, challenging traditional market compositions.

The primary and secondary real estate markets in Dubai have exhibited healthy growth, with a 46 percent increase in transactions and a 37 percent increase in the total value of registered sales in September-October this year compared to 2022.

The study stressed the importance of considering factors beyond transaction data alone to assess the overall health of the real estate market. It pointed out that analyzing the number of bookings is crucial for a holistic view.

The Dubai real estate market has seen significant growth, prompting speculation about an impending market correction. However, the study emphasized that recent data indicating a decline in off-plan transactions does not signify an impending market downturn.

  

Publish Date: Fri 10 Nov 2023

Source: https://www.arabianbusiness.com/industries/real-estate/dubai-real-estate-market-remains-robust-with-46-percent-surge-in-transactions-37-percent-increase-in-value-new-study

 
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Property Prices in Dubai’s Prime Markets to Grow 5% Next Year, Knight Frank Says

Property values in the emirate witnessed a notable 19% annual increase in the third quarter.

A recent report suggests that Dubai’s high-end residential market is poised for significant expansion, primarily driven by limitations in supply and a resurgence in demand from key source markets like China and India.

Knight Frank’s report indicates an expected 5% rise in property prices in Dubai’s prime areas, including The Palm Jumeirah, Emirates Hills, and Jumeirah Bay Island, for the upcoming year, while other residential segments are projected to grow at 3.5%.

During the third quarter of this year, average residential property prices across Dubai increased by 19% annually and by 5% compared to the previous quarter, resulting in a cumulative increase of 30% since the first quarter of 2020.

Apartment prices saw a 19% annual increase in the third quarter, with villa prices rising by 18%.

Over the first nine months of this year, average residential prices displayed an annual growth of 15.6%.

Faisal Durrani, Partner and Head of Research for Mena, noted that Dubai’s prime property markets continue to be highly sought after, contributing to 4.8% of the total transaction value in the first nine months of 2023.

Dubai saw 116,116 new property transactions valued at about Dh429.6 billion ($117 billion) in the first nine months of 2023, based on the latest data from the Dubai Land Department.

The data reveals a remarkable 33.8% annual increase in total transactions, with values rising by over 36.7% during the same period.

The Dubai property market rebounded significantly from the slowdown induced by the coronavirus, thanks to government initiatives like residency permits for retirees and remote workers, as well as the expansion of the 10-year golden visa program.

The emirate’s residential market experienced its most significant quarterly price hike in a decade during the third quarter, fueled by heightened property demand in Dubai, according to a report from property consultancy ValuStrat.

Faisal Durrani observed that the market for ready-to-move homes continues to dominate, with 51% of transactions occurring between the first and third quarters being secondary market sales, indicating a high proportion of end-users and second-home buyers.

During the first nine months of this year, off-plan sales reached Dh100 billion, while sales of ready homes for the same period amounted to Dh104.9 billion, as reported by Knight Frank.

Notably, apartments in Dubai South exhibited one of the most substantial growth rates, with prices increasing by 73% annually in the third quarter, according to the report.

Jumeirah Lakes Towers closely followed with a 67% increase, as did Umm Suqeim Third, also known as Madinat Jumeirah Living, with a 37% increase.

Jumeirah Islands reported a 65% annual increase in villa prices in the third quarter, reaching Dh2,680 per square foot, establishing itself as the neighborhood with the most rapid increase in villa values, as per the report’s findings.

Additionally, Dubai South’s villas displayed the most significant quarterly price change, soaring by 33% in the third quarter.

Faisal Durrani pointed out that while their forecasts are optimistic, they are not without risk. Factors such as a global economic slowdown, potential regional tensions, and their impact on the local economy pose medium to high risks. An escalation in regional tensions could particularly lead to higher oil prices, potentially contributing to global inflation and increased interest rates, which, in turn, might result in higher borrowing costs and reduced demand.

Currently, there are 77,864 homes (excluding branded residences) under construction, scheduled for delivery by the end of 2028, with an annual average of around 13,000 homes over the next six years, a figure notably lower than historical completion rates.

Despite concerns about oversupply, Faisal Durrani emphasized that this presents a lower risk to the market. From their perspective, the city remains undersupplied, especially given population growth projections and the lack of new homes in prime neighborhoods and in the higher price brackets.

  

Publish Date: November 07, 2023

Source: https://www.thenationalnews.com/business/property/2023/11/07/property-prices-in-dubais-prime-markets-to-grow-5-next-year-knight-frank-says/

 
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Dubai saw a total of 116,116 new property transactions valued at approximately Dh429.6 billion ($117 billion) in the first nine months of 2023. This growth reflects the ongoing economic expansion in the emirate, according to the latest data from the Dubai Land Department.

The total number of transactions surged by 33.8 percent compared to the previous year, with values increasing by over 36.7 percent during the same period.

Sultan bin Mejren, the director general of the Dubai Land Department, said, “This sector’s growth aligns perfectly with Dubai’s proactive economic agenda aimed at enhancing the emirate’s competitiveness and attractiveness to global investors.”

Al Barsha South Four led in terms of transaction volumes with 10,351 deals during the period. This was followed by Dubai Marina with 9,071 transactions, Business Bay with 7,414, and Wadi Al Safa 5 with 5,602 transactions.

Al Merkadh, Al Thanyah 5, Burj Khalifa, Al Khiran First, Hadaeq Mohammed bin Rashid, and Jebel Ali First rounded out the top 10 in terms of transactions.

In terms of value, Dubai Marina ranked at the top with more than Dh36.7 billion worth of deals during the period, followed by Palm Jumeirah at Dh28.51 billion, Jebel Ali Industrial First at Dh27.93 billion, and Wadi Al Safa 3 with Dh25.33 billion.

Other areas with significant deal values included Business Bay, Burj Khalifa, Al Merkadh, Al Khairan First, Hadaeq Mohammed bin Rashid, and Jebel Ali First.

Dubai Marina claimed the top spot among the top 10 areas in terms of mortgage deals, with 1,186 transactions, followed by Al Thanyah Fifth, Al Barsha South Fourth, and Burj Khalifa.

Dubai’s property market has made a strong recovery from the slowdown caused by the pandemic, supported by government initiatives such as residency permits for retirees and remote workers, as well as the expansion of the 10-year golden visa program.

In the third quarter, Dubai’s residential market saw its most significant quarterly price increase in a decade, driven by high property demand in Dubai, as reported by property consultancy ValuStrat.

The ValuStrat Price Index (VPI) for Dubai’s residential market increased by 6.1 percent in the third quarter, with villa and apartment prices rising by 7.6 percent and 4.8 percent, respectively.

These positive trends in the property market coincide with Dubai’s strong economic growth. Emirates NBD forecasts a 3.5 percent growth in Dubai’s economy for 2023, following a 4.4 percent expansion in the previous year.

Dubai has retained its position as the world’s leading destination for attracting greenfield foreign direct investment (FDI) projects in the first half of this year, solidifying its status as a global FDI hub despite global economic challenges. This information comes from Dubai Media Office, citing Financial Times fDi Markets data, which indicates that the emirate attracted 511 greenfield projects during the period, surpassing second-placed Singapore by 325 projects.

  

Publish Date: Oct 31, 2023

Source: https://www.thenationalnews.com/business/property/2023/10/31/dubai-records-117bn-of-property-deals-in-first-nine-months-of-year/

 
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The residential real estate market in the UAE continued to show strength in the third quarter of 2023, with increased transaction volumes and prices in Abu Dhabi and Dubai driven by higher buyer demand, according to a report from CBRE.

In Abu Dhabi, the total number of residential transactions in the three months ending in September increased by 84.3% compared to the previous year. This growth was fueled by a 101.6% surge in off-plan sales and a 46% rise in secondary or ready home sales. On the price front, average apartment prices in Abu Dhabi increased by 0.9% annually, while average villa prices experienced a marginal decrease of 0.1% during the same period.

The resurgence of the UAE’s property market can be attributed to government initiatives and overall economic growth driven by higher oil prices. Abu Dhabi, in particular, recorded significant real estate transactions worth Dh46.33 billion in the first half of 2023, a more than doubled value compared to the previous year, with transaction volume rising by 41% on an annual basis.

In terms of rental properties, average apartment and villa rents in Abu Dhabi each increased by 1.1% in the third quarter of 2023. Average apartment and villa annual rents stood at Dh66,823 and Dh161,683, respectively, according to CBRE.

In Dubai, residential prices surged by 19.6% annually during the same three-month period, with average apartment and villa prices increasing by 19.7% and 18.9%, respectively. The total volume of residential transactions in the first nine months of the year reached a record high.

Taimur Khan, Head of Research of Mena at CBRE in Dubai, stated, “Strong performance continues in the UAE’s residential market in the third quarter. The high level of activity and the limited upcoming supply in both Abu Dhabi and Dubai are likely to continue driving price growth in the future.”

On the supply side, Abu Dhabi saw the delivery of 2,262 units to customers from the beginning of the year up to the third quarter of 2023. Additionally, 3,521 units are expected to be completed by the end of the year. In Dubai, 27,095 residential units were estimated to have been delivered from January to the end of September, with 34,651 more units expected to be handed over by the end of the year, with a significant portion in specific areas.

 

Publish Date: October 26, 2023

 

Source: https://www.thenationalnews.com/business/property/2023/10/26/uae-residential-market-continued-to-perform-strongly-in-third-quarter/

 
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Dubai’s Residential Market Records Highest Quarterly Capital Gains in a Decade

Dubai’s residential market has achieved its highest quarterly capital gains in ten years, driven by increased property demand in the emirate, according to a report by property consultancy ValuStrat.

In the third quarter, the ValuStrat Price Index (VPI) for Dubai’s residential market rose by 6.1% on a quarterly basis. Villa prices increased by 7.6%, and apartment prices by 4.8% during this period.

On an annual basis, the VPI showed a 15.1% increase, with villa and apartment prices rising by 19.8% and 11% respectively.

In the villa segment, The Palm Jumeirah, Jumeirah Islands, Dubai Hills Estate, and Mudon recorded the highest capital gains. In the apartment category, Discovery Gardens, The Greens, The Palm, and Dubailand Residence Complex were the top performers.

Prime properties also recorded capital gains in the third quarter, with prime property valuations rising by 16.5% annually and 6.6% quarterly.

The VPI for prime villas reached a new 10-year high, with capital gains of 20.2% year on year and 8.5% quarterly. Valuations of prime apartments rose 13.6% annually and 5.2% quarterly.

Dubai’s property market has rebounded strongly from the pandemic-induced slowdown, supported by government initiatives and the economic gains generated by Expo 2020 Dubai and higher oil prices.

During the third quarter, Dubai’s non-oil private sector economy saw robust business activity, with sales growth hitting its highest in more than four years.

The emirate’s economy expanded by an annual 3.2% in the first half of 2023 to Dh223.8 billion ($60.9 billion).

The emirate recorded 11,308 ready or secondary home sales transactions during the third quarter, with an average ticket size of Dh2.3 million.

Residential asking rents in the emirate rose by 27.2% in the third quarter compared to the same period last year, with villa and apartment rents increasing by 38.7% and 19.1% on an annual basis.

Based on developer completion schedules, the number of new build units entering the market this year was estimated at 53,715 homes.

Total project completions in the first nine months of this year stood at 21,507 apartments and 2,068 villas.

During the third quarter, office sales transactions grew by 9% year on year to 631, with Business Bay retaining its position as the most popular choice for office sales.

 

Publish Date: October 24, 2023

 

Source: https://www.thenationalnews.com/business/property/2023/10/24/dubai-residential-market-records-highest-quarterly-capital-gains-in-a-decade/

 
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Maya V, a project by London Gate, achieved a remarkable feat by selling out within just one hour of its launch. London Gate has exciting plans on the horizon, including Marina 106, Nadine I & II, and Maya V, all strategically located in sought-after areas of Dubai. The swift sell-out of Maya V underlines the company’s robust presence in the market. London Gate is poised to deliver on its promise of ‘Extraordinary Living’ with 2,000 units slated for completion in the next six months.

Recent studies in the UAE real estate sector project 1,800 new units in New Dubai and 1,900 in Central Dubai by 2026. Eman Taha, CEO of London Gate, emphasized the company’s vision to redefine Dubai’s skyline and property landscape, setting new industry standards. The developments will cover prominent areas, featuring one of Dubai Marina’s tallest buildings, unique branded residences, and exceptional residential spaces across Dubai land and Jumeirah Village. London Gate aims to establish a lasting legacy through unwavering commitment to quality, style, and innovation, becoming synonymous with excellence in luxury living in Dubai.

London Gate’s upcoming projects, including Marina 106 in Dubai Marina, Nadine I & II in Al Furjan, and MAYA-5 in JVT, promise outstanding features and amenities. The surge in demand for quality residential properties in Dubai reflects the growing interest in luxury and premium brands, drawing the attention of both developers and buyers. To bring these projects to life, London Gate has partnered with the real estate investment company, One Broker Group.

 

Publish Date: Thu 19 Oct 2023

 

Source: https://www.khaleejtimes.com/business/dubai-tower-sells-out-in-the-first-hour-of-launch

 
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In Q3 2023, Dubai’s real estate market experienced an impressive 40% year-over-year surge, resulting in AED97.5 billion in sales. Transactions also grew by 6% from Q3 2023 to the previous quarter. Despite this remarkable demand for rentals and purchases, Dubai’s real estate market is considered reasonably valued, as stated by ZāZEN Properties.

The city has seen substantial price growth, with a 14.6% annualized increase in real estate prices and a 20.3% annualized growth in rental prices from mid-2022 to mid-2023, figures that stand out on a global scale.

Key contributing factors to Dubai’s thriving real estate market, as highlighted by Madhav Dhar, COO, and founding member of ZāZEN Properties, include its reputation as a geopolitical safe haven, attracting international investments, and a growing focus on sustainable developments. Dubai’s anticipated population growth and streamlined visa regulations, combined with its favorable business environment and luxurious lifestyle, are driving international interest in the region, fueling real estate market growth.

Furthermore, Dubai’s commitment to sustainable development and its establishment as a unique global entity position its real estate market for continued expansion. This is why Dubai is a top destination for real estate, particularly given its current and projected fair market value. It also boasts one of the lowest bubble risks in the world when compared to other real estate markets.

 

Publish Date: Tue 17 Oct 2023

 

Source: https://www.arabianbusiness.com/industries/real-estate/dubai-real-estate-market-witnesses-a-40-yoy-spike-with-aed97-5bn-sales-in-q3-2023

 
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Wealthy investors from Russia and China are increasingly turning to Dubai’s luxury real estate market as geopolitical tensions rise and economic uncertainties persist in their home countries. This surge in demand has fueled significant growth in the UAE’s real estate sector, particularly in Dubai.

Dubai and Abu Dhabi have been the primary destinations for these investors, with a notable increase in luxury real estate investments. Russians, in particular, have been active buyers in Dubai, with around 29 Russian investors purchasing properties in the past year. Chinese investors have also shown increased interest, with 21 deals facilitated for Chinese clients during the same period.

This heightened demand has led to substantial price appreciation in Dubai’s luxury real estate segment. Transaction volumes have surged, with off-plan residential sectors in Abu Dhabi and Dubai witnessing significant year-to-date increases.

Both Russian and Chinese investors have made a significant impact on the high-end property market, with Russians initially dominating sales in 2022. However, Chinese investment has also been on the rise, reaching historic peaks before settling at a substantial level this year.

Popular investment locations for Russians include Dubai Marina, Palm Jumeirah, and Jumeirah Beach Residences, while Chinese investors prefer areas like Jumeirah Golf Estates, Downtown Dubai, and The Springs.

Additionally, there has been a notable increase in short-term rental demand from Russian tourists in Dubai, drawn to the region’s favorable climate and attractions. This trend began before the pandemic and has continued, with Russian tourists accounting for a significant portion of short-term rental bookings.

Chinese investors are increasingly considering Dubai’s thriving property market. Research indicates that the UAE has become one of the top destinations for Chinese cross-border home buyers. Dubai’s business-friendly environment, strategic location, and residency programs have made it an attractive investment choice for wealthy Chinese nationals.

Overall, Dubai’s luxury real estate market is experiencing substantial growth, driven by a surge in Russian and Chinese investor interest, offering them a safe haven and high-yield opportunities.

 

Publish Date: 10 Oct 2023

 

Source: https://www.arabianbusiness.com/industries/real-estate/ultra-rich-russian-chinese-investors-flock-to-dubai-luxury-real-estate

 
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Sales of homes in Dubai priced at over $10 million have surged to a new record high in the third quarter of 2023, reaching 277 transactions for the first nine months of the year. This substantial increase is driven by a growing demand for luxury residences in the emirate, according to a report by global consultancy Knight Frank.

The emirate witnessed a remarkable 40.7% year-on-year increase in the volume of residential sales valued at more than $10 million during Q3 2023. The total worth of homes priced over $10 million in Dubai, which is considered the Middle East’s hub for commerce and tourism, exceeded $1.59 billion in the July-September period, according to the report.

Faisal Durrani, the partner and head of research for the Middle East and Africa at Knight Frank, noted, “Demand for luxury homes in Dubai remains strong, and the supply continues to lag behind demand.”

In the first half of the year, Dubai emerged as one of the world’s busiest markets for sales exceeding $10 million, surpassing other global cities like New York, Hong Kong, London, Los Angeles, and Singapore.

The average price per square foot for homes sold for over $10 million was Dh6,557 ($1,785.2) at the end of the September quarter, as indicated by Knight Frank’s analysis.

Demand for luxury homes in Dubai remains robust, attracting both local and international buyers. Key areas like Palm Jumeirah continue to witness consistent interest, accounting for a significant portion of sales in the over $10 million price range.

In the last quarter, the total value of sales over $10 million surpassed $825.2 million in Palm Jumeirah, followed by Emirates Hills ($189.6 million), Umm Suqeim 3 ($141.8 million), MBR City ($125.6 million), and Jumeirah Bay Island ($117.9 million).

Dubai’s prime neighborhoods, such as the Palm Jumeirah, Emirates Hills, and Jumeirah Bay Island, have experienced consistent price growth over nine consecutive quarters.

The demand for luxury homes in Dubai continues to rise, driven by an increasing number of wealthy individuals. Global high-net-worth individuals are projected to invest $2.5 billion in Dubai’s property market in the current year, according to Knight Frank.

Approximately 22% of these high-net-worth individuals are willing to allocate between $5 million and $10 million for real estate purchases in the emirate, with 8% ready to invest more than $80 million.

Last year, Dubai recorded 219 home sales valued at over $10 million, with a total transaction value of $3.8 billion, positioning the emirate behind New York, Los Angeles, and London in terms of luxury home sales.

Publish Date: October 05, 2023

Source: https://www.thenationalnews.com/business/property/2023/10/04/sales-of-10-million-plus-homes-in-dubai-surge-to-record-high-in-q3/