The Dubai real estate market witnessed a notable year-on-year increase of 19.9 percent in the fourth quarter (Q4) of 2023, marking a significant milestone in residential capital gains for the city, reaching its highest point in a decade. According to the ValuStrat Price Index (VPI), which employs ValuStrat’s proprietary research and valuations to track real estate price movements, the index achieved an impressive 103.1 points, reflecting a 6.7 percent quarter-on-quarter (QoQ) increase.
The ValuStrat Dubai Q4 2023 Real Estate Report highlights a noteworthy surge in apartment prices, particularly in the mid-affordable communities, leading to a 15.4 percent year-on-year increase in the apartment segment VPI, reaching 84.3 points. Notable areas with significant annual growth rates include Discovery Gardens, The Greens, Motor City, Town Square, Dubailand Residence Complex, and Dubai Production City.
Additionally, the villa market exhibited robust growth, with capital values reaching 133.1 VPI points, representing a 24.9 percent year-on-year increase and a 7.7 percent quarter-on-quarter rise. Jumeirah Islands, Palm Jumeirah, Dubai Hills Estate, and Mudon emerged as top performers, posting substantial annual gains.
Prime properties, both villas and apartments, experienced considerable valuation increases, with prime market villas reaching a 10-year peak at 147 points, reflecting a 26.6 percent year-on-year jump and an 8.3 percent quarter-on-quarter growth in capital gains. Meanwhile, prime apartments saw their annual gains accelerate to 16.4 percent, reaching 94.9 index points.
The construction segment of Dubai’s real estate market thrived in 2023, with 26,740 apartments and 3,919 villas completed, accounting for 55 percent of the year’s preliminary estimates. Notable apartment completions included Samana Golf Avenues (233 units), Westwood by Imtiaz (188 units), and Binghatti Heights (365 units).
Looking ahead to 2024, an estimated 50,866 new homes are expected to enter the market. The off-plan market witnessed a significant development, with the average ticket size of off-plan homes rising by 18.8 percent year-on-year to reach AED 3.7 million. However, off-plan Oqood (contract) registrations experienced a 21.3 percent year-on-year decline.
Transaction activities in Q4 were vibrant, recording the highest number of ready secondary home sales in history at 12,001, reflecting a 24.1 percent year-on-year increase and an 11.2 percent quarter-on-quarter rise. Total investments amounted to AED 25.6 billion, with the citywide average transacted price for ready units in Q4 at AED 14,520 per square meter, showing a 5.8 percent year-on-year increase but a 0.9 percent quarter-on-quarter decline.
Rental markets also thrived, with residential asking rents experiencing a 12.8 percent year-on-year jump. Villa rentals showed a modest annual increase of 9.2 percent, while apartment rents surged by 15.9 percent year-on-year, reflecting continuous demand for housing in Dubai, supported by an estimated residential occupancy rate of 86.7 percent during Q4.
The office sector mirrored the positive trajectory of the residential market, with the VPI for Dubai’s office capital values growing by 7.5 percent quarterly and an impressive 32.1 percent annually, reaching a record 110.8 points. Grade A office spaces saw a 37 percent increase in value over the past year, while Grade B office spaces experienced a 24 percent increase during the same period.
Looking forward, the Dubai real estate market is anticipated to continue its growth in 2024, driven by a projected 4 percent expansion in the UAE economy, particularly in the non-oil sector. Factors contributing to this growth include increased demand due to Dubai’s rising population, a higher number of tourists, and improved transportation.
Publish Feb 10, 2024
Source: https://www.rprealtyplus.com/international/dubai-real-estate-market-sees-yoy-increase-of-199-percent-113970.html
Connect with our Business Setup Experts to know more: hidubai@smartzonesuae.com
+971 529604444 / +971 43614555