Dubai property sees highest occupancy in 2023
Dubai property sees highest occupancy in 2023
Approximately 57,000 apartments were purchased in Dubai in the first half of 2023, causing the residential real estate market to be the busiest year on record. Savills, the world's leading provider of real estate services, said in its latest report that the number of residential transactions increased by 44% year-over-year to 57,700 units - 11,600 villas and 46,100 apartments. Transaction activity levels in the first half of 2023 increased by 209% compared to the five-year average for this period.
According to the deputy director of Middle East research at Savills, in the summer the demand for housing in the UAE is low. However, this trend seems to be changing recently as Dubai property continues to be popular with residents and international audiences looking for stability in a volatile economy. Market activity is likely to remain high.
Apartments accounted for the majority of the 28,400 apartments absorbed in the second quarter across the city, showing a 33% annual growth rate. During the first half of the year, purchasing activity in the sector of the market of housing under construction increased significantly, which accounted for more than 53% of the sold objects.
The increase in demand for off-plan purchases shows that buyers are choosing to delay getting expensive credit terms in the current financial climate, according to Savills. In addition, this reflects an increase in the number of new projects launches, which increased from 24,900 to 27,900 units over the period in the first half of 2022.
Although real estate prices continue to rise, the pace of its growth has slowed down a bit. In some areas, the projected double-digit price increases seen in virtually all micro markets last year have begun to ease, according to Savills. While this is happening, price increases in established areas with little new supply and lower vacancy rates continue to be more robust.
Palm Jumeirah, one of Dubai's most sought-after residential areas, has seen one of the biggest semi-annual increases in apartment prices. Prices are up 19% overall compared to the second half of 2022. Other high-growth markets were Downtown Dubai and Dubai Marina, where unit prices rose by 14% and 11%, respectively. Properties in Al Furjan (9%), Sports City (8%) and Town Square (5%) also increased in value. While prices have risen slightly in these locations, future supply and high vacancy rates may dampen further growth.
