Dubai's Exceptional Fourth Quarter Performance

Historic Transaction Volume and Value: Q4 2023 witnessed an extraordinary surge in Dubai's real estate market, setting new records for both transaction volume and value. A total of 36,920 transactions were recorded, amounting to a staggering 147 billion AED, marking this as the most remarkable fourth quarter in Dubai's history.

Sales Transactions Soar: Sales transactions exhibited remarkable growth, with an 18% increase quarter-on-quarter and an impressive 26% surge year-on-year, reflecting the market's robust performance.

Price Records Shattered: Property prices officially surpassed the previous high set in 2014. The average transactional price per square foot reached 1,640 AED, up from 1,609 AED in the preceding quarter, underscoring Dubai's status as a global investment hotspot.

Strong Cash Transactions: Cash transactions remained resilient, posting a substantial 19% increase quarter-on-quarter. This growth is attributed to ongoing foreign investments flowing into Dubai's real estate market.

Mortgage Transactions on the Rise: Mortgage transactions also recorded an 8% increase quarter-on-quarter. High rental prices incentivized tenants to transition into property ownership, contributing to this positive trend.

Primary Market Flourishes: The primary market registered significant growth, with transactions increasing by 22% both on a quarterly and annual basis. Dubai developers continued to address the demand by adding to the supply.

Luxury Property Segment Thrives: The luxury property market demonstrated exceptional strength across various categories:

  • - Properties Sold Above 10 Million AED: Transactions surged by an impressive 31% compared to the previous quarter and an astounding 95% increase year-on-year.
  • - Properties Sold Above 36,750,000 AED: Remarkably, transactions for properties above 36,750,000 AED (10 million USD) witnessed a substantial 42% increase quarter-on-quarter and a staggering 133% increase compared to the same quarter last year.
  • - Ultra-Prime Properties Sold Above 100,000,000 AED: Transactions for ultra-prime properties, those sold above 100,000,000 AED (27.2 million USD), surged by 42% quarter-on-quarter and an impressive 113% year-on-year. Notably, 88% of ultra-prime property transactions were in the primary market segment, indicating increasing demand for such properties where suitable options are scarce and new luxury developments are appealing to high-net-worth individuals relocating to Dubai.

Commercial Property Sector Holds Strong: Although experiencing a 5% decline quarter-on-quarter, the commercial property sector remained 61% higher than the same quarter last year. Two undisclosed transactions, involving an ultra-premium hotel brand, represented 50% of the total transaction value during the quarter.

Bulgari Residences Tops Luxury Apartments: Bvlgari Residences in Jumeirah Bay Island emerged as Dubai's most expensive apartment address, with an average price per sq. ft of 9,869 AED during the quarter. Meanwhile, villas in Palm Jumeirah were the costliest option for villa living, with an average price per sq. ft of 6,728 AED.

Robust Rental Market: The rental market remained robust in the fourth quarter, with apartments yielding an average of 7.25%, up from 7.05% in Q3. Villas and townhouses averaged a 5.26% yield, demonstrating stability.

Supply and Demand Balance: In 2023, 37,000 units were delivered, consistent with the five-year average, while developers launched 55,000 units, the highest since 2015. Apartments accounted for 68% of the total under-construction supply, with townhouses and villas making up 20%.

Anticipating 2024: With 64,000 units scheduled for delivery in 2024, the rental market may see an increase in available units, potentially impacting rental yields. Notably, Jumeirah Village Circle leads in the number of units under construction, followed by Business Bay and Mohammad Bin Rashid City.

In summary, Dubai's real estate market in Q4 2023 delivered exceptional performance, characterized by robust transactions, significant price appreciation, and a flourishing luxury property segment across various categories. This performance further solidifies Dubai's position as a premier global real estate destination.

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Source : Research Team