Dubai's residential market witnessed a significant increase in sales volume and sales in the second quarter of 2023, with more than 30,000 property transactions and total sales of more than Dh91 billion. This was by far Dubai's best-ever second quarter, with a 35% increase in the number of transactions and a 54% increase in the value of sales compared to the second quarter of 2022.
Demand for apartments surged, with the median price per square foot reaching Dh1,336, the highest ever recorded in the second quarter. Prices of off-plan villas also witnessed a rapid rise, up 32% compared to Q2 2022, driven by increased interest in luxury villa communities and attractive post-delivery payment plans offered by developers.
Affordability is also driving demand in emerging locations. Dubai Marina was the best-selling area for existing homes, while Jumeirah Village Circle led the way in off-plan sales. Damac Lagoons led the off-plan villa market in terms of sales, with 642 units valued at Dh1.8 billion.
Demand in the prime market
Dubai's prime real estate market is booming, making Dubai a luxury destination that rivals established global markets. The Palm Jumeirah, Emirates Hills and Jumeirah Bay Island have attracted continued demand from Ultra High Net Worth Individuals (UHNWIs), cementing Dubai's position as a preferred location for second homes.
With an average transaction price of approximately Dh3,360 per square foot (approximately $915 per square foot), Dubai continues to maintain its position as one of the most affordable luxury residential markets in the world. Last year, prices for prime homes in Dubai soared by 44%, the highest in the world. The market's growth momentum continues with a 16% increase in the first quarter and an annual growth rate of 54.6%.
Dubai's ultra-high-end real estate market is booming, with the most expensive apartment, located on Bvlgari Lighthouse Island 2, selling for Dh137 million. The top five most expensive villas sold included Emirate Living, where a villa sold for Dh150 million.
Dubai has cemented its position as one of the world's busiest markets for luxury properties. For as little as $1 million, buyers can secure approximately 1,130 square feet of prime residential space in Dubai - three times more than in London, New York or Singapore. This affordability, coupled with Dubai's exceptional real estate offerings, has fueled demand from the wealthy.
In 2022, Dubai ranked fourth among the most active luxury markets, with 219 homes sold priced over $10 million, totaling $3.8 billion, behind London, Los Angeles and New York. Dubai also ranked fifth in the sale of homes priced over $25 million.
Dubai's prime real estate market is experiencing an imbalance between supply and demand, driving significant price growth. There have been limited launches of new projects, resulting in a scarcity of supply. However, this trend is beginning to shift, with new apartment launches increasing in prime submarkets such as The Palm Jumeirah. By 2025, 289 homes are expected to be delivered, of which 54% will be villas. Notable projects include Palm Flower at Alpago, Ellington Beach House, Bvlgari Mansions and Sur La Mer. ongoing villa construction projects at Damac Lagoons and Tilal Al Ghaf are adding to the upcoming market stock.
Market Outlook
Dubai's prime residential market has become the fastest growing in the world, thanks to its safe haven status, the influx of various international UHNWIs and the government's effective response to pandemics. Despite the potential risks associated with global economic conditions, Dubai's reputation as a safe haven enhances its appeal in times of uncertainty.
Soliman Hossameldin, Market Manager at Property Shop Investment, commented: "Current market conditions, coupled with a continued steady growth trajectory, are fostering confidence among homeowners and investors. The record-breaking results we have seen in the second quarter of 2023 are testament to the robustness and resilience of the Dubai real estate market.
