Staff Report
Dubai, UAE
Dubai recorded a 52.4 percent jump in real estate transactions to 29,332 in the first quarter of 2023, according to a report by CB Richard Ellis (CBRE), a global real estate advisory.
This has been underpinned by a 96.1 percent growth in off-plan transactions and a 12.6 percent growth in secondary transactions, it said. In the year to March 2023, average residential prices in Dubai grew by 12.8%. Over this period, average apartment prices rose by 12.4 percent to reach Dh1,234 per square foot, and average villa prices increased by 14.8 percent to reach Dh1,455 per square foot.
“On the back of rental rates reaching significant levels, we have started seeing a slight moderation in the rental market. Rents in Dubai’s residential market rose by 26.3 percent in the 12 months through March 2023, down from the 27.7 percent growth rate registered the previous month. Over the same period, average apartment and villa rents grew by 26.3 percent and 26.2 percent, respectively,” the report said.
Data from the Dubai Land Department show that in the first quarter of 2023, the total number of rental contracts registered increased by 8.9 percent from the year prior, reaching a total of 148,882 contracts. Nonetheless, elevated rental rates have significantly impacted demand. In the first quarter of 2023 and compared to the same period last year, the number of new registrations dropped by 12.6 percent, whereas renewals grew by 29.7 percent, highlighting the fact that tenants are less willing to move, particularly when considering the potential higher rents when relocating, this especially is the case in key residential hubs.
Taimur Khan, Head of Research – MENA at CBRE in Dubai, comments, “Despite rental rates reaching significant levels, we have started seeing a slight moderation in the rental market. We are seeing a number of listings in key residential areas such as Downtown Dubai, Dubai Marina, and Palm Jumeirah increasingly reducing their rental rates, a signal that the peak may have been reached.”
In terms of supply, 9,833 new units are estimated to have been delivered in Dubai in the first quarter of 2023, with 56.2 percent of this supply located in Downtown Dubai, Dubai Creek Harbor, and Business Bay. A further 55,261 units are under construction and expected to be handed over by year-end, although materialization rates are expected to be lower. Of this new stock, 36.9 percent is scheduled to be delivered in Meydan One, District Seven, and Business Bay.
