Dubai Real Estate Market Expects A Rise Of 7-10% In 2023; Top 2 Areas To Buy Properties In The City
The real estate industry in the UAE sees massive predictions for 2023, and they’re obviously even more optimistic than before. We keep repeating that the real estate market in the UAE, especially in Dubai, has been flourishing lately, and this has been happening even in the past few years when the whole world saw all kinds of crises, starting with the healthcare one and finishing with massive economic problems that surrounded the world.
The geopolitical situation did not help at all, but still, Dubai managed to see a fantastic situation regarding its economy and society as well.
Start a new life in Dubai in 2023
This has already become the goal for a lot of people in 2022 as well, but we definitely see some excellent numbers for 2023 if we look at the situation in the real estate market. Dubai managed to become a true hub for the whole world in terms of tourism and real estate as well, and this keeps attracting people with massive fortunes to come here and invest. Wealthy people are still dreaming of starting a new chapter in their lives, and a lot of them are choosing Dubai.
Dubai also managed to become one of the most business-friendliest cities in the Middle East, and this is a great reason for which lots of multifunctional firms and lots of startups have based their operation here.
If it’s done correctly and in partnership with a firm that has in mind the customer’s benefits, investments in Dubai can turn out to be extremely advantageous.
Taking such a challenging road can be a pretty tough decision, but with expert advice, things don’t have to be this complicated and stressful.
Everyone who wants to invest their hard-earned money in an off-plan or move into a property in Dubai must have a sound knowledge of some facts and basics. This is where Starling Properties’ expertise comes in handy.
Dubai's real estate market expects massive surge in 2023
As we already said, the real estate market in Dubai is expecting a massive surge this year, according to expert predictions. Real estate experts are telling us that this year we will see a significant increase of more than 7-10% in prices, and this will mostly be triggered by prime units. There are already some locations that have reached –possible price ceilings, according to the latest reports.
It’s also been revealed the fact that villa and apartment prices in Dubai are still going up, but most of them are already showing signs of stabilization since the end of last year. They are reportedly poised to register a citywide increase of about 7 to 10% in 2023, and this is likely due to the strong demand for properties, ValuStrat new report reveals.
One issue that is really important to be mentioned is the fact that The ValuStrat Price Index (VPI), which is the element that is tracking the market performance of residential properties across the emirate, slowed down. It's important to mention the fact that is went to less than 1% monthly increments for the last four months of 2022. The number was able to reach 86 points.
It’s also essential that we state the fact that over the last year, according to official notes, the majority of freehold locations also witnessed little or no change in capital values.
“Dubai’s residential market [is] displaying signs of price stabilization,” the report, which has been recently released, said.
Overall, residential capital values posted a year-on-year (YoY) growth of 12.7%, while rental deals were up 25% YoY.
Back in November 2022, ValuStrat reported that apartment prices in Dubai were starting to stabilize after months of solid growth.
According to official numbers, the prices may be stabilizing, this is for sure, and ValuStrat is expecting citywide residential property prices to register an average growth of 7-10% by the end of 2023. Here are some more important issues that we have to discuss about.
"This would mainly be driven by the prime market – villas in general. The rest of Dubai's residential market has already reached possible price ceilings and may witness negative growth in some areas where new supply is expected," Haider Tuaima, Director & Head of Real Estate Research, told Zawya website not too long ago.
It's also important to note the fact that during the Q4 of 2022, off-plan sales volume surged by 112.1% to 15,071 transactions. Another issue that we have to bring up is the fact that the number of deals for ready units went up by 37.3% to 11,165.
One other essential issue that we have to mention is the fact that Dubai is expected to see a higher visitor footfall this year following the lifting of COVID-19 restrictions in China.
Just in case you haven't figured it out by now, this is a major source market for the emirate's tourism sector. Dubai will also be able to receive a boost from the upcoming COP28, which will host 140 heads of state and government leaders and more than 80,000 delegates.
According to ValuStrat, the newly launched UAE Tourism Strategy 2031 is also likely to boost tourism investment in various related sectors, including travel, aviation, and hospitality. Let's talk about this strategy for a bit so that you understand what it is.
Dubai has big plans for the future of tourism
The future of tourism in Dubai looks more than bright. The destinations in the Middle East are turning to tourism in more than an effort to diversify their national economies. But it's worth noting the fact that they are also trying to position themselves to compete on a larger scale globally.
A few days ago, the ruler of Dubai, Sheikh Mohammed bin Rashid Al Maktoum, launched the UAE Tourism Strategy 2031. The move has been made in an effort to boost tourism's contribution to the national gross domestic product to $122 billion a year. This is bound to happen by 2031.
According to the official notes coming from the Skift website, this tourism strategy has its eye on an annual increase of $7.4 billion, and it aims to attract new investments. These are expected to be $27.2 billion to the tourism sector in the country and attract 40 million hotel guests in 2031.
"The strategy includes 25 initiatives and policies to support the development of the tourism sector in the country, according to the government media office. With the return of tourists, the United Arab Emirates' tourism revenues surpassed $5 billion in the first half of this year."
The same article addresses an important developer in Dubai.
Dubai-based developer Nakheel revealed last week that it had secured financing of $4.6 billion. Nakheel announced that the financing would be utilized to boost the development of its new projects. It's worth noting the fact that this will be including the 17 square kilometres-long Dubai Islands — the man-made island being planned along the emirate's northern coastline.
A Nakheel spokesperson made sure to explain the fact that this reflects the confidence of the banking institutions in the strategic new focus of the company. "We are entering a new phase of growth. This new era of Nakheel will be defined by our commitment to developing exceptional communities, enhancing customer-oriented services, and delivering value across all touch points," a statement from the company read.
Dubai is a world hub in terms of tourism these days, and this is the very reason for which the real estate industry here is basically booming, as we keep highlighting since back in 2022.
According to the important publication Khaleej Times, this tourism strategy aims at strengthening the country's position as one of the strongest destinations all over the world.
It's also looking to boost competitiveness by attracting billions as more and more tourism investments are welcome. As we continue to reveal, the UAE is currently one of the top destinations for tourism in 2023, and there are reportedly 22 million passengers that are flying into the country's airports – this was recorded only in Q1 2022.
This massive plan that we have been addressing above is targeting the encouragement of tourism investments in all kinds of related sectors. These include travel, hospitality, and aviation as well. They also create massive new investment opportunities.
Top Dubai areas to rent in 2023
Here, we continue to address the best areas to rent in Dubai in 2023 as more investors are seeing massive opportunities in the UAE. According to the newest reports, it looks like Business Bay and Dubai Marina are still dominating the Dubai property market.
This was revealed at the end of 2022, and it looks like these areas remain the most preferred choices of buyers and tenants as well. It's also been reported that the average prices in these locations are seeing an important upward trend in 2023 after a successful 2022, and this is due to the increase in demand and interest of buyers and tenants. The latest data is revealed according to Zoom Property Insights.
It's also worth noting the fact that the strategic location and proximity to the iconic landmarks in Dubai also make them some pretty attractive options for both buyers and tenants, as we revealed above. There are a lot of new developments on their way in these areas, and they are also expected to continue the upward momentum in 2023 as well.
Regarding the top areas for buying property in Dubai, Business Bay is leading the charts for the most locations, and the average price of studios here is Dh870,000 while apartments and villas cost around Dh1,333,000 and Dh22,900,000, respectively, according to the latest official reports coming from Zoom Property Insights.