Housing transactions in Dubai in 10 months broke the entire record of last year

And the average real estate prices rose 19.1 percent in October data.

Residential real estate transactions in Dubai in the first 10 months of 2023 surpassed by number record transaction volume last year, emphasizing the steady growth in demand in the secondary market and in the construction phase, both from foreign investors and new migrants.

Total number of registrations 93,590 deals. with residential properties, surpassing the total number of transactions for the whole of 2022, when 92,178 transactions were recorded, the highest ever recorded in a year to date, data from CBRE's latest Dubai Residential Real Estate Market Survey shows.

However, the number of transactions for the month in October decreased by 23,6% year-on-year (6,407), while the number of off-plan housing transactions increased by 57.2%. Transactions on the secondary market in October increased by 29,5%.

ValuStrat's third quarter real estate research shows that net migration to Dubai for the first nine months of 2023 has surpassed the full year 2022, showing an annual net population growth of 2.2% as of end-September 2023, compared to an annual growth of 2.1% in 2022.

According to the survey, the third quarter saw the highest quarterly capital gains in a decade. The VPI (ValuStrat Property Index) rose a record 6.1% quarter-on-quarter to 96.6 points, 15.1% higher than last year. Villa valuations exceeded 2014 peaks by 2.6%, with villa prices up 19.8% year-on-year and 7.6% quarter-on-quarter to 123.6 VPI points.

The highest quarterly figures were boasted by Palm Jumeirah (9.5%), Jumeirah Islands (9.5%), Dubai Hills Estate (9.3%) and Mudon (9.0%). The VPI index for apartments posted its highest capital gains in a decade, rising 4.8% quarter-on-quarter to 79.7 points, up 11% year-on-year, 29.2% below its 2014 peak. Discovery Gardens (7.5%), The Greens (7.3%), Palm Jumeirah (6.7%) and Dubailand Residence Complex (6.6%) posted the strongest quarterly performance.

Taimur Khan, head of Mena research at CBRE in Dubai, said that while overall transaction volumes were down in October compared to last year, it did not mean demand had weakened.

Given the high level of demand for properties under construction and limited supply, off-plan sales fell 57.2% in the year to October 2023. The absorption we are seeing in the off-plan segment of the market, however, has also been almost unprecedented. If you look at the sales of apartments under construction that have been launched since 2022, our overall analysis shows that 67.5% of these apartments have been sold to date, and for the core market, this number averages over 90%,Khan said.

Average house prices in Dubai rose by 19.1% over the year until October 2023, which is slightly lower than the growth rate of 19.6% registered a month earlier. Over the same period, average prices for apartments and villas increased by 18.7% and 21.4%, respectively.

In October 2023, average apartment prices were US$ 4011 per square meter and average villa prices were US$ 4849 per square meter. Although the average apartment sales rate per square meter is still 8.3% below the 2014 peak, it has already exceeded the 2014 level in some areas. On the other hand, the average rate of villa sales has exceeded the 2014 figures by 14.1%.

The apartment segment in the Downtown Dubai market recorded the highest sales per square meter at US$ 7351, while the villa segment in the Palm Jumeirah market recorded the highest sales per square meter at US$ 15150, CBRE said.

The rental housing market in Dubai also continues to show moderate growth since the beginning of the year. In the year to October 2023, average rents in Dubai increased by 19.7%, recording a decline from the 20.6% increase in September 2023. During this period, average apartment rents rose by 19.9%, while average villa rents rose by 18.0%. As of October 2023, the average annual rents for apartments and villas were AED 110,080 (US$29,974) and AED 322,891 (US$322,891) respectively. The highest annual rents for apartments and villas were respectively found in Palm Jumeirah Island, where the average rent was AED256,204 (US$69,762), and in Al Barari, where rents reached AED1,096,675 (US$298,618).