The Dubai real estate market saw significant movements during Q3 2023, with a particular focus on capital gains, property valuations, and sales transactions across various segments
The Dubai real estate market, during Q3 2023, saw the highest quarterly capital gains in a decade, according to a new report by ValuStrat.In the housing sector of the Dubai property market, the Villa Price Index (VPI) saw a record 6.1 percent growth compared to the previous quarter, reaching 96.6 points on the ValuStrat Price Index. This showed a 15.1 percent increase compared to the same period last year.
Dubai villa and apartment valuations rise in Q3 2023
Villa valuations surpassed the peaks seen in 2014 by 2.6 percent, with villa prices increasing by 19.8 percent year-on-year (YoY) and 7.6 percent quarter-on-quarter (QoQ) to reach 123.6 VPI points.
Palm Jumeirah (9.5 percent), Jumeirah Islands (9.5 percent), Dubai Hills Estate (9.3 percent) and Mudon (9 percent) were the top performers during this quarter.
In terms of apartments, VPI increased 4.8 percent quarter-on-quarter (QoQ), reaching 79.7 points. This showed an 11 percent YoY increase, however, it is still 29.2 percent below 2014 peaks.
The top quarterly performers in this category were Discovery Gardens (7.5 percent), The Greens (7.3 percent), Palm Jumeirah (6.7 percent), and Dubailand Residence Complex (6.6 percent).
Prime property valuations in both villas and apartments saw a 16.5 percent YoY increase and a 6.6 percent QoQ increase, respectively, reaching 106.2 points.
Prime villas, however, reached a new 10-year high of 135.7 points, with capital gains of 20.2 percent YoY.
While prime-located apartments lagged behind their villa counterparts, annual gains accelerated to 13.6 percent and 5.2 percent compared to the previous quarter, reaching 90.1 index points, the report said.
New construction seen in Dubai during Q3 2023
The real estate market also saw substantial activity in terms of new construction, the report said.
Based on developer completion schedules, approximately 53,715 new build units were estimated to enter the market in 2023.
As of the first nine months of the year, 21,507 apartments and 2,068 villas were completed, equivalent to 44 percent of preliminary estimates for the entire year.
Off-plan property market in Dubai
The off-plan housing market saw a 13 percent YoY increase in the average purchase size, reaching AED2.5 million.
The average transacted price for off-plan properties in the city was AED20,035 per square meter (AED1,861 per square foot).
Off-plan contract registrations (Oqood) rose by 19.1 percent YoY and 2 percent QoQ, equivalent to investments worth AED36.9 billion.
Mudon, Business Bay, and Dubailand Residential Complex broke their individual monthly records for the first time with the highest number of off-plan properties traded during the third quarter.
Move-in ready apartments sees over 11,000 transactions in Q3 2023
The ready (secondary) home sales segment saw 11,308 transactions during the third quarter, representing a 17.7 percent YoY increase.
However, it saw a slight 5 percent decline compared to the previous quarter, however, the average purchase size of ready-to-move-in properties declined by 1.4 percent YoY to AED2.3 million.
A noteworthy 41.5 percent of all ready home sales, the majority of which were apartments, were priced below AED1 million. During the same period, 52 sales of homes worth over AED30 million were recorded.
Office space sector
The office space in the Dubai market saw an impressive growth, with annual capital gains of 25.5 percent.
The ValuStrat Price Index reached 103 points, reflecting a 7.3 percent quarterly increase compared to a 100-point base in Q1 2015.
The weighted average price for an office in Dubai was AED14,230 per square meter (AED1,322 per square foot).
Several central business districts in Dubai, including Jumeirah Lake Towers, DIFC, Business Bay, Downtown Dubai, and Barsha Heights, posted double-digit annual growth.
In terms of office space construction, an estimated 252,783 square meters (2.7 million square feet) were scheduled for completion in 2023, with an additional 12,680 square meters (136,500 square feet) planned for 2024.