Ishrath Jaigirdar,
Dubai, UAE
Land and property transaction value in Dubai jumped 20 percent to Dh634 billion (US$173.7 billion) in 2023, up from Dh528 billion (US$144.65 billion) in 2022 and 111.33 percent when compared to Dh300 billion reported for the year 2021 – marking a strong year-on-year growth in the emirate’s vibrant real estate sector that is driving its economy.
The total transaction value of US$173.7 billion is higher than the Gross Domestic Product (GDP) of 156 countries, and higher than the GDP of countries including Ukraine, Kuwait, and Ethiopia.
Dubai’s thriving real estate has recorded its highest-ever transaction volume of 1.6 million in 2023, exhibiting growth of 16.9 percent from 2022.
The real estate sector recovered remarkably post-pandemic. From transaction value dropping to Dh175 billion in 2020 to jumping to Dh300 billion in 2021 and nearly doubling to Dh528 billion in 2022, the industry showed resilience and recovered quickly. The value nearly tripled the pre-pandemic figure of Dh226 billion in 2019, according to an annual report by Dubai Land Department (DLD).
While the world struggled to fight the disease and catch up economically, the UAE opened its doors, leading to a strong influx of international visitors who, impressed by the country’s tenacity and strength to overcome such adversity, decided to invest and settle. Despite a year’s delay, hosting the Expo 2020 during the pandemic posed to be a challenge that highlighted the country’s potential for rapid recovery. The mega event welcomed more than 24 million visitors in 2021 and 2022, bolstering the real estate, tourism, and the economy at large. This, along with the following Russia-Ukraine war, saw many expats adopt Dubai as their second home.
Eng. Marwan bin Ghalita, Acting Director General of the Dubai Land Department, said, “The value of real estate transactions exceeded Dh634 billion with the number of transactions reaching over 166,400 real estate transactions in 2023. This marked a growth of 20 percent in value and 36 percent in terms of the number of transactions compared to 2022. Real estate investments also showcased exceptional performance, with their value growing by 55 percent during the same period, reaching approximately Dh412 billion,” thereby emphasizing the vigour and versatility of Dubai’s economic performance.
The number of investors jumped 20 percent to 113,655 in 2023. Foreign investors made up bulk of the count, buying properties worth Dh276.28 billion. Moreover, the number of female investors rose substantially to 38,059, and they brought in Dh90.5 billion across 46,725 investments. This marked a growth of 53.9 percent in terms of value, 42.5 percent in the number of female investors, and 39.8 percent in the number of investments compared to 2022.
The real estate market is projected to continue its upward trajectory in 2024. According to Shehzad Jamal, Partner, Strategy & Consulting, MEA, Knight Frank, the mainstream segment and prime segment are expected to grow in value terms by 3.5 percent and 5 percent, respectively. Furthermore, he listed the key drivers of this growth. The government’s initiative driven by the Dubai Economic Agenda (“D33”) will increase economic growth and population diversity. Resurgence in demand from key source markets such as China and India, and affordability of prime homes in Dubai compared to more mature markets are other major factors of the growth.
Similarly, Andrew Cummings, Head of Residential Sales Middle East at Savills, predicted a trend in growth in 2024, specifically in the prime segment. He said, “Dubai has evolved into the ultimate lifestyle destination, with world-class schools, healthcare, and infrastructure coupled with an attractive business environment. This is continuing to bolster demand for real estate, and with government reforms lowering the entry level to achieve a ten-year golden visa, we expect this demand to continue.”
The emirate’s prime segment was instrumental in aiding towards the industry’s boom last year. According to Knight Frank, 110,000 homes have been launched or are slated for completion by end of 2028. With nearly 10,000 high net worth individuals thronging the emirate in the past year, the demand for luxury homes still awaits to be met.
On the price rise of prime properties, Faisal Durrani, Partner, Head of Research MENA, Knight Frank, said, “Homes worth US$10 million plus are being snapped up rapidly, almost irrespective of location, strongly hinting at continued price growth at the top end of the market, albeit the pace of growth is likely to be lower than the market has recorded over the last couple of years. Furthermore, it is worth noting that prime prices in Dubai have grown by 136 percent since January 2020 and remains well ahead of the global annual prime residential growth rate of 2.1 percent.”
Based on a report by Unique Properties, Dubai’s centimillionaire population, those with a net worth of more than US$100 million, is on pace to grow by almost 80 percent through 2033. Moreover, the emirate is forecasted to see further growth within this demographic in 2024 due to factors including its prime location, streamlined processes, and tax-free policies.
Arash Jalili, Founder and CEO of Unique Properties, said, “While the demand for luxury real estate remains high in major markets like New York and London, Dubai has definitely solidified its position as a high-value market, particularly, post-pandemic.”
Ends
 in 2023){kind=link}