Real Estate Performance in Q2, 2023

Dubai’s real estate sector stands as a paragon of excellence, captivating global attention with its state-of-the-art, opulent, and awe-inspiring properties. This alluring combination has proven to be a magnet for investors worldwide, beckoning them to participate in Dubai’s real estate market and savour the bountiful rewards offered by its ultra-luxurious properties. Boasting an unmatched return on investment (ROI) of 7-8% makes Dubai’s real estate unparalleled in the global arena. Notably, the second quarter of 2023 witnessed a continuation of this remarkable trend, solidifying Dubai’s position as a beacon in the real estate realm.

Driving this unequalled performance are several key factors that have propelled the city’s property market to new heights, ensuring its constant evolution with groundbreaking developments. Foremost among these factors are the distinctive quality and innovative designs of the properties on offer, lower taxes for corporates, world-class infrastructure, highest return and rental value, and above all safety are some of the factors which are setting Dubai apart from any other city in the world. This uniqueness has undoubtedly contributed to attracting investors seeking premium offerings and superior returns.

Real estate transaction in Q2, 2023

Q2, 2023 has been the most successful Second quarter in the last 10 years in terms of both the number and value of the transactions. According to DXB Interact, in Q2, 2023, a total of 30,264 sales transactions worth AED 91.2 billion (US $24.8 bn) were recorded. The number of transactions in Q2, 2023 increased by a whopping 34.8% compared to Q2, 2022, however, compared to the previous quarter (Q1, 2023), the number of transactions decreased by 2.1%

In terms of sales value, there is a 2.8% increase in Q2, 2023 compared to the previous quarter and a colossal 54.4% increase in Q2, 2022. 

Out of 30,264 sales transactions – 23,244 apartments were worth AED 47.5 billion4,808 villas worth AED 20.9 billion, 925 commercials worth AED 1.6 billion, and 1,287 plots worth AED 21.2 billion.

Compared to Q1, 2023, there was a 1.4% increase in the number of apartments while Villa’s sales plummeted by 19.9% in Q2, 2023. The number of Commercial properties increased by 4% and the number of plots sold also surged by 18.7%.

When compared to Q2, 2022, there was a 54.1% increase in the number of apartments sold while the number of villas sold decreased by 12%. The number of Commercial properties surged by 30.6% and Plots by 8.2%.

Decline in Off-plan Property Sales Transactions

According to DXB Interact, the number of property sales transactions in Q2, 2023 stood at 15,889 worth AED 40.8 billion. This was a 10.4% decline from the previous quarter but a 44.2% increase from Q2 2022. 13,023 apartments were sold worth AED 30.2 billion. This was a 74.7% increase in the sales of apartments compared to Q1, 2022 but a 3.9% decrease from Q1, 2023. 

Sales of villas in Q2, 2023 were 2,739 worth AED 10.2 billion. This was a 22.2% decrease compared to Q2, 2022 and a 33.5% decrease from Q1, 2023. 127 Commercial properties were sold worth AED 369.5 million in Q2, 2023. This was a 209.8% increase compared to Q2, 2022 and an 81.4% increase compared to Q1, 2023. 

Surge in Ready Property Sale Transactions

According to DXB Interact, there were 14,375 ready property sale transactions took place in Q2, 2023 worth AED 50.4 billion. This was a 9.2% increase from the previous quarter and a 25.7% increase from Q2, 2022. 

The number of ready apartments sold in Q2, 2023 was 10,221 worth AED 17.3 billion. This was a 9% increase from Q1, 2023 and a 33.9% increase compared to Q2, 2022. Sales of villas in Q2, 2023 were 2,069 worth AED 10.7 billion – a 9.8% increase from the previous quarter and a 6.4% increase compared to Q2, 2022. 

798 Commercial properties were sold worth AED 1.3 billion in Q2, 2023. This was a 2.6% decrease from the previous quarter however, an impressive 19.6% increase compared to Q2, 2022. The sales of plots in Q2, 2023 was AED 21.2 billion – an increase of 18.7% compared to the previous quarter and 8.2% compared to Q2, 2022.

Off-plan vs. Ready Property Sales 

Going by Sales volume, 45% of the real estate transactions that took place in Q2, 2023 were for ready properties, while 55% are for off-plan properties. 

In terms of Sales value, 42% of the transactions are for ready properties and 58% for the off-plan.

Surge in Mortgage Transaction

A total number of  8,009 Mortgage transactions worth AED 32.8 billion happened in Q2, 2023. Compared to Q2, 2022, there was a 38.1% increase in the number of transactions and a 29.2% increase in total value.

Property Prices Witnessed an Upward Trend

Property prices also witnessed a rise in the second quarter of 2023According to DXB Interact, the median price for the property increased from AED 1,150 per sq. ft. in Q2, 2022 to AED 1,336 in Q2, 2023. This was a 16.2% year-on-year (YoY) increase in property prices. When compared to Q2, 2014, the property prices in Q2, 2023 increased by 29.1%.

The price per sq. ft. for an Off-plan apartment in Q2, 2023 stood at AED 1,810 while the prices for an Off-plan villa were AED 1,207 per sq. ft.  For the Plot, the price per sq. ft. was AED 615. The price per sq. ft. for the Ready apartment was AED 1,140 while the price per sq. ft. for the Ready villa was AED 978.

Demand for Luxury Properties Remains Resilient

Q2, 2023 was one of the best quarters for the sales of luxury properties. 62% of the total properties sold in the second quarter of 2023 were above AED 1 million.

  • 38% of the properties sold were the priced below AED 1 million
  • 28% of the properties sold were in the price range of AED 1 million-2 million
  • 14% of the properties sold were in the price range of AED 2 million-3 million
  • 12% of the properties sold were in the price range of AED 3 million-5 million
  • 8% of the properties sold were above the price of AED 5 million

This sales value proportion does not include mortgage transactions.

Most Expensive Properties Sold in Q2, 2023

Villas: The most expensive villas sold in Q2, 2023 were at Emirate Living (AED 150 M), MBR District 1 (AED 90 M), Dubai Hills (AED 82M), Palm Jumeriah (AED 76M), and The World (AED 74M)

Apartments: The top 5 projects with the most expensive apartments sold were – Bulgari Lighthouse Dubai at Island 2 (AED 137 M), BV Residences 3 at Jumeira Bay (AED 122 M), Six Senses Residences The Palm at Palm Jumeriah (AED 105 M), Bluewaters Residences 7 at Dubai Marina (AED 80 M) and Private Residences Dubai at Dubai Water Canal (AED 78 M).

Most Expensive Areas 

According to DXB Interact, the top 5 most expensive areas to buy an Apartment by per sq. ft. in Q2, 2023 were – Dubai Marina (AED 3,565 AED per sq. ft), Palm Jumeirah (AED 2,729 per sq. ft.), Downtown Dubai (AED 2,361 per sq. ft), Dubai Creek Harbour (AED 2,059 per sq. ft.), and Dubai Hills (AED 1,983 per sq. ft).

The top 5 most expensive areas to buy a Villa by per sq. ft. in Q2, 2023 were – Tilal Al Ghaf (AED 1,496 per sq. ft), Arabian Ranches 3 (AED 1,429 per sq. ft.), Damac Lagoons (AED 1,328 per sq. ft.), Damac Hills (AED 1,219 per sq. ft.), and Mudon (AED 1,125 per sq. ft.)