Dubai records over Dh1.5 billion in real estate deals in one day, sector will grow by up to 46% in 2023
Property prices in Dubai grew by 20-40 per cent over the last 12 months
Dubai: The Land Department recorded over Dh1.5 billion in real estate transactions on Wednesday, the Dubai Media Office tweeted today. This record volume sets off the tone for real estate sales in the new year, carrying on from the sales performance over the last year.
Over the period from December 2021 to December 2022, property prices in Dubai increased by 20 to 40 per cent, data by DLD showed. This boost was due to a combination of factors, from a very high influx of millionaires and billionaires, to the country being a pit stop for the FIFA World Cup Qatar 2022.
Property prices in Palm Jumeirah alone grew by 59 per cent. Proptech firm Realiste compiled the data over the past year and predicted that the industry would grow by a whopping 46 per cent in 2023.
“Dubai will remain attractive to foreign buyers who are seeking to shield their assets. It will strengthen its position as the geopolitical instability and energy crisis grow. As a result, there will be a further boost in demand for local property and the market in 2023,” Alex Galtsev, CEO of Realiste, commented.
Who is buying?
Realiste, in addition to AI-powered data anlaysis, offers buyers the chance to buy property at lower rates with minimal visits. This has given them an insight into who is buying property in Dubai.
“Regarding geography, we see that Russian investors dominate the market for now due to the relocation process of wealthy Russian people to the UAE. Besides, buyers from India, Asia, and Europe are also very active in Dubai,” Galtsev said.
By correctly choosing a complex and apartment, an investor may get an annualized ROI of 15-20 per cent."
- Galtsev
Demand for green spaces
An interesting metric from Realiste’s data is the increase in demand for properties with green spaces. Dubai Hills is one such area that saw a drastic growth in demand, and grew by 53 per cent, with property prices averaging Dh1.6 million.
Talking about particular areas, our AI suggests investing in Jumeirah Village Circle. It is a rapidly growing district where prices are relatively low and, on average, account for Dh770,000, according to our AI. But in the three following years, they will increase by 38 per cent. This area is suitable for daily rentals through AirBnB and seasonal rentals (for people who come here to work for 6-9 months). Real estate investors may earn up to 5.1 per cent yearly rental yield in this area.
Dubai Hills is another excellent area for buying property to lease. Here an investor can earn up to 5.3 percent yearly rental yield. But the cost of property in this area is twice higher as in Jumeirah Village Circle."
- Galtsev
2023: Highest and lowest growth
The firm also claims that areas that saw the most growth in 2022 may see that tapering off in 2023. Some of these areas that have reached their ‘full potential’ are Palm Jumeirah , Trade Centre area, Al Wasl etc. And areas that did not reach their full price potential can expect double-digit growth, Realiste predicts, with areas such as Jumeirah Village Triangle and Jebel Ali leading those numbers.
Dubai, and the UAE, have economically performed well in stark contrast to the global economy. With an IPO boom in the region, led by the UAE and Saudi Arabia, economic indicators an outlook remains positive for the emirate. While the latest forecasts suggest the UAE is up for another year of solid GDP growth, the same cannot be said for large swathes of the global economy.
The latest PMI update from S&P Global also gives a positive outlook even though businesses in the UAE have become more cautious in anticipation of the global performance.