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A Bullish Quarter: Key Insights into Q3 Real Estate Trends

Dubai’s real estate sector has reached unprecedented heights in terms of transaction volume. Throughout the year, it consistently set new records in each quarter, a testament to its robust performance. Dubai stands as an exemplar of excellence, capturing global attention with its modern, luxurious properties, drawing investors from around the world. The alluring blend of opulence has established Dubai as a real estate magnet, offering a remarkable 7-8% return on investment (ROI) that surpasses global standards. In the second quarter of 2023, this trend continued, cementing Dubai’s status as a beacon in the real estate realm.

Several factors drive this exceptional performance, including the exceptional quality and innovative designs of properties, favorable corporate tax policies, world-class infrastructure, high returns and rental values, and above all, a strong focus on safety. These factors distinguish Dubai from other cities worldwide, making it a prime choice for investors seeking premium offerings and superior returns.

Q3, 2023 has been one of the most successful third quarters in terms of both the number and value of the transactions.  According to DXB Interact, in Q2, 2023, a total of 31,399 sales transactions worth AED 97.5B (US $26.54 bn) were recorded. There was a whopping 23.1% increase in the number of transactions in Q3, 2023 compared to the same quarter previous year. Compared to Q2, 2023, the number of transactions increased by 3.8%

In terms of sales value, there is a 7% increase in Q3, 2023 compared to the previous quarter and a colossal 40.4% increase compared to Q3, 2022. 

Out of 31,399 sales transactions – 22,136 were apartments worth AED 43.2 billion5,627 villas worth AED 27.9 billion, 934 commercials worth AED 1.5 billion, and 2,702 plots worth AED 25 billion.

Compared to Q2, 2023, there was a 4.8% decrease in the number of apartments, while villa sales plummeted by 16.8% in Q2, 2023. The number of Commercial properties increased by 1% and the number of plots sold surged by whopping 111.6%.

When compared to Q3, 2022, there was a 23.3% increase in the number of apartments sold while the number of villas sold decreased by 2.9%. The number of Commercial properties surged by 9.8% while Plots witnessed an exponential increase of 196.9% in Q3, 2023 compared to Q3, 2022.

According to DXB Interact, the number of property sales transactions in Q3, 2023 stood at 16,697 worth AED 49.8 billion. This was a 5% increase compared to Q2, 2023 and 20.4% increase from Q3 2022. 

12,575 apartments were sold worth AED 28.5 billion. This was a 3.4% decrease in the sales of apartments compared to Q2, 2023 but a 24% increase from Q3, 2022. 

Sales of Villas in Q3, 2023 were 3,628 worth AED 19.3 billion. This was a 31.5% increase from the previous quarter but 0.5% decrease from Q3, 2022. 

129 Commercial properties were sold worth AED 184.8 million in Q3, 2023 which was a 63.3% increase compared to Q3, 2022 and a 1.6% increase compared to Q2, 2023. 365 Plots were also sold in Q3, 2023 worth AED 1.8 billion.

According to DXB Interact, there were 14,702 ready property sale transactions took place in Q3, 2023 worth AED 47.7 billion. This was a 2.4% increase from the previous quarter and a 26.4% increase from Q3, 2022. 

The number of ready apartments sold in Q3, 2023 were 9,561 worth AED 14.7 billion. This was a 6.5% decrease from Q2, 2023 but a 22.5% increase compared to Q3, 2022. Sales of villas in Q3, 2023 were 1,999 worth AED 8.6 billion – a 3% decrease from the previous quarter and a 7% decrease compared to Q3, 2022. 

805 Commercial properties were sold worth AED 1.3 billion in Q3, 2023. This was a 0.9% increase from the Q2, 2023 and an impressive 4.3% increase compared to Q3 2022.

Going by Sales volume, 43% of the real estate transactions that took place in Q3, 2023 were for ready properties, while 57% are for off-plan properties. 

In terms of Sales value, 34% of the transactions are for ready properties and 66% for the off-plan.

A total number of 8,611 Mortgage transactions worth AED 29.3 billion happened in Q3, 2023. Compared to Q3, 2022, there was a 52.9% increase in the number of transactions but a slight 6.5% decrease in total value.

Property prices also witnessed a rise in the third quarter of 2023According to DXB Interact, the median price for the property increased from AED 1,347 per sq. ft. compared to AED 1,179 per sq. ft.  in Q3, 2022. This was a 14.3% year-on-year (YoY) increase in property prices. When compared to Q3, 2014, the property prices in Q3, 2023 increased by 35.7%.

The price per sq. ft. for an off-plan apartment in Q3, 2023 was AED 1,850, while the prices for an off-plan villa were AED 1,262 per sq. ft. For the Off-plan Commercial Properties, the price per sq. ft. was AED 1,575.

The price per sq. ft. for the Ready apartment was AED 1,118 while the price per sq. ft. for the Ready villa was AED 1,074.

Q3, 2023 was one of the best quarters for the sales of luxury properties. 95% of the total properties sold in the third quarter of 2023 were above AED 1 million.

  • 17% of the properties sold were the priced above AED 5 million
  • 22% of the properties sold were in the price range of AED 3 – 5 million
  • 23% of the properties sold were in the price range of AED 2 million-3 million
  • 34% of the properties sold were in the price range of AED 1-2 million
  • 5% of the properties sold were below the price of AED 1 million

This sales value proportion does not include mortgage transactions.

Villas: The most expensive villas sold in Q3, 2023 were at Emirate Living (AED 209 M), Palm Jumeriah (AED 202 M), Tilal Al Ghaf (AED 100 M), The World (AED 79 M) and MBR District 1 (AED 68 M).

Apartments: The top 5 projects with the most expensive apartments sold were – Jumeirah Marsa Al Arab at Marsa Al Arab (AED 420 M), Six Senses Residences The Palm at Palm Jumeriah (AED 116 M), Como Residences at Palm Jumeriah (AED 112 M), Jumeirah Living at Marsa Al Arab (AED 65 M), and One Za’abeel Tower (AED 60 M).

According to DXB Interactthe top 5 most expensive areas to buy an Apartment by per sq. ft. in Q3, 2023 were – Dubai Marina (AED 2,995 AED per sq. ft), Downtown Dubai (AED 2,490 per sq. ft), Business Bay (AED 2,292 AED per sq. ft), Dubai Creek Harbour (AED 2,177 per sq. ft.), and Jumeirah Lakes Towers (AED 2,035 per sq. ft).

The top 5 most expensive areas to buy a Villa by per sq. ft. in Q3, 2023 were 

MBR District 1 (AED 1,615 per sq. ft) Damac Lagoons (AED 1,598 per sq. ft). Arabian Ranches 3 (AED 1,523 per sq. ft.), Mudon (AED 1,229 per sq. ft). and Wadi Al Safa 3 (AED 1,177 per sq. ft).

Dubai’s real estate market is poised for an extraordinary surge in property prices, outshining prominent cities such as Miami and Paris. According to AI-driven research conducted by Realiste, Dubai’s real estate sector is on the cusp of substantial expansion in 2024, with growth projections hovering around 15%. This optimistic outlook is fuelled by a trifecta of factors: robust demand, a flourishing economy, and heightened foreign investor interest. 

The burgeoning demand in Dubai’s real estate sector will be propelled by a confluence of factors such as – urban development, infrastructure projects, and a burgeoning population. These dynamics are providing a fertile ground for both local and international investors, making the market particularly appealing.

Dubai’s thriving economy, characterized by diversification and innovation, will further amplify the attractiveness of its real estate sector. This environment will foster stability and opportunities for investors seeking long-term growth and stability. Moreover, the heightened interest from foreign investors will underscore Dubai’s status as a global real estate investment hub and will make it a prime destination for those seeking lucrative prospects in the real estate market.