Dubai real estate continues to reign supreme year after year. The market closed the year 2022 with 90,881 transactions, making it a record-breaking year as it surpassed the 2009 figure of 81,182 transactions.

With the dawn of the new year, the market continues its high performance. The latest records from DXBInteract show that 9,827 sales were made during January 2023, amounting to 28B. As per statistics, properties in Business Bay attracted buyers the most. They were followed by JVC, Dubai Marina, and Dubai Creek Harbour. This high performance gives a hint of the emerging trends in Dubai real estate in 2023

Latest Trends in Dubai Real Estate in 2023

While the market continued its upward trend in January, things may head in a different direction throughout the year. Here are the emerging trends in Dubai real estate in 2023 that will dictate the market:

1.      A Modest Steep on the Cards

Property prices in Dubai have been on the rise for the last couple of years. However, 2023 may witness a modest steep rise, halting the growth of the market. Zoom Property Insights projects that the market will have a 5 per cent growth by the end of the year as compared to 11 per cent in 2022.

This halt is mainly attributed to the rising interest rate. With effect from 2nd February 2023, the base rate for Overnight Deposit Fact (ODF) has been raised to 4.65 per cent from 4.4 per cent by the Central Bank of the UAE.

Having said that, experts believe that there will be a marginal impact on the property market since roughly 70 per cent of property transactions are carried out in the form of cash. This may, however, affect the mortgage industry.

2.      More Rental Agreement Renews

The rental market in Dubai witnessed an increase of nearly 27 per cent towards the end of 2022. A further breakdown shows that there was a 27.5 per cent and 25.7 per cent increase in the average rent of apartments and villas in the emirate, respectively. With this increase, the average price of rental apartments in Dubai reached AED 91,795, while villas for rent are available at an average price of AED 274,740.

Due to this significant increase in rent, coupled with the effects of global inflation, the cost of living has risen up. Therefore, people now prefer extending their lease instead of relocating. This has resulted in a higher number of rental agreement renewals. The same trend is expected to remain prevalent in 2023 as well.

3.      Apartment Market Back on Track

2020 and 2021 saw the dominance of the villa segment in the Dubai property market. They were averaging around 20 per cent in terms of annual growth. The apartment market, on the other hand, was struggling to reach double-digit growth.

Things are changing now in the market, as per the emerging trends in Dubai real estate in 2023. Zoom Property Insights reveals that around 67,700 apartments were sold in 2022. The average price of apartments for sale in Dubai also touched the 1.2 million figure. Compared to 2021, this shows an increase of 71.1 per cent and 20.9 per cent in terms of the number of transactions and the average price.

This growth demonstrates that the interest of buyers is drifting towards the apartment sector again. It could be due to affordable prices, as compared to villas, or the launch of many new developments that offer state-of-the-art apartments in Dubai.

4.      More Focus on Affordable Communities

With the rising living cost in Dubai, buyers and tenants have put their focus on affordable communities.

For buyers, International City, Liwan, and Discovery Gardens remain the preferred choices. In International City, the average price is AED 232,000, AED 324,000, and AED 676,000 for studios, 1-bed, and 2-bed apartments, respectively.

A studio in Liwan can be purchased at AED 370,000. For 2 and 3-bedroom apartments, the average price is recorded at AED 365,000 and AED 552,000.

Studios in Discovery Gardens are available at AED 309,000, while 1-bedroom apartments cost AED 459,000.

When it comes to affordable areas to rent in Dubai, International City, with the average rent falling between AED 19,000 and AED 55,000, tops the chart. Dubai Silicon Oasis has an average rent between AED 25,000 and AED 68,000.

Besides the aforementioned, rental properties in Bur Dubai, Discovery Gardens, and Dubai Sports City attract tenants. According to the latest trends in Dubai real estate in 2023, these areas will see more traction because of their comparatively low prices.

Wrapping Up

In a nutshell, these aforementioned trends in Dubai real estate in 2023 are expected to shape the market. The prices will increase, but at a sluggish pace, providing ample opportunities for buyers and investors to enter the market and leverage its lucrative opportunities.

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