Dubai on track to record the busiest year for its residential sector

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According to a survey conducted by a leading global real estate services provider, the data indicates that there were 46,100 apartment sales and 11,600 villa sales during the first half of 2023.

The ongoing year is poised to be the most bustling period for Dubai’s residential sector, driven by a remarkable increase of 44 percent in half-year transactions, totaling 57,700 units comprising both villas and apartments.

A survey conducted by the global real estate services provider Savills reveals that during the first half of 2023, a record-breaking 46,100 apartments and 11,600 villas were sold, marking the highest half-yearly transaction volume to date. In comparison to the five-year average, the current period demonstrates an impressive surge of 209 percent in activity levels.

However, as reported by the Dubai Land Department, the entire real estate sector in Dubai, encompassing both residential and commercial properties, achieved its highest-ever semi-annual sales during the first half of 2023, totaling 60,440 sales transactions with a combined value of Dh177.3 billion.

“Traditionally, the summer months in the UAE have been associated with a slowdown as many residents travel during the school break. However, this trend appears to be shifting in recent times, with Dubai properties maintaining popularity among both residents and international audiences seeking stability in an uncertain economic environment,”

stated Swapnil Pillai, Associate Director of Middle East Research at Savills.

Pillai mentioned that it’s still early to provide a comprehensive assessment of market activity during the typically slower summer period, but early indications suggest that market activity is likely to remain robust. During Q2, a total of 28,400 units were absorbed throughout the city, marking a 33% annual growth, with apartment units representing the majority.

Savills‘ research indicates that activity in the off-plan segment remains strong, constituting nearly 53% of the units sold. This increase in off-plan transactions reflects a preference among buyers to delay committing to higher lending rates in the current economic environment. It also signifies an upsurge in new project launches, which reached 27,900 units in H1 2023, compared to 24,900 units throughout the entirety of 2022.

JLL’s Q2 Market overview report reveals that in the second quarter of 2023, off-plan residential sales in Dubai increased by 38% in value and 30% in volume compared to the previous year. In Abu Dhabi, the value of off-plan transactions more than doubled from Dh1.8 billion to Dh3.8 billion. In Dubai, the majority (57%) of transactions in this category occurred within the Dh500,000 to Dh2.0 million range, with investors primarily focusing on studios and 1BR units in areas such as JVC, Dubailand, and MBR City.

A survey conducted by Kamco Invest demonstrates that driven by the remarkable buoyancy of the Dubai real estate sector, property sale transaction value across the GCC surged by 9.9% to $90.7 billion year-on-year in the first half of 2023. Dubai’s property transactions contributed 54% of the region’s total transacted value, offsetting the decline in other key markets such as Saudi Arabia, Qatar, and Kuwait in the first half.

Savills‘ report highlights that while the majority of off-plan transactions were observed for apartments, villa and townhouse developments were preferred in the ready category. A total of 67% of villa and townhouse transactions during H1 were for ready units. Popular locations for ready villa units included Damac Hills 2, Al Furjan, and Dubai Hills Estate.

“Asset prices continue their upward trajectory; however, the pace of growth has slowed slightly. The double-digit price growth that was witnessed across nearly all the micro-markets throughout most of 2022 has started to taper in locations with significant handovers and planned supply,”

noted the Savills report. Meanwhile, price growth across established locations with limited upcoming supply and lower vacancy levels remained relatively more sustained.

News Source: Khaleej Times

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