While the outbreak of Covid-19 took a toll on the global real estate market, the industry in Dubai recovered much faster than expected. Since the beginning of 2022, property prices in Dubai have increased at an unprecedented rate.
According to the Dubai Land Department, Q2 2022 marked the highest quarterly volume of sales transactions over the past 10 years, achieving a total of 22,504 transactions worth AED 59.154 billion.
The Q4 2022 market report also strongly indicates promising results for 2023, as prices continue to rise, fueled mainly by the growing demand from foreign investors. That’s not all; new year speculations on Dubai’s real estate market start on a positive note expecting a more aggressive bull run in 2023.
Residential property segments will see a whopping 46% growth with an overall price increase of 15%. As a result, there will be a further boost in demand for local property and the larger real estate market in 2023.
Trends To Expect
The coming year projects to throw many surprises in terms of price hikes. Hot favorites of 2022, like Trade Center First, Al Wasl Part 2, and Palm Jumeirah, expect to see only moderate growth in prices. In contrast, locations that are not doing great currently, like Wadi Al Safa 4, Hessayan First, and Al Yalay, are hoping to see a sharp rise in prices by up to 46%.
The majority of the areas that saw the sharpest growth in 2022 are believed to have reached their price limit and will grow moderately through 2023. Underestimated places that have not yet achieved their expected price bars will see noticeable growth. Apartments and water-front units like Beach Vista at Emaar BeachFront will also be favorably influenced by the price hike.
This trend has partly been influenced by the rising inflation globally, where people are looking to utilize investment opportunities in relatively affordable locations.
As a general takeaway from these trends and other insights from leading investment firms, these price hikes are likely to exceed pre-pandemic levels.
High-End Properties And Branded Residencies To Rise
With an anticipated 13.5 percent increase in prices, high-end properties in Dubai will have another remarkable year, alongside residential properties. This is the highest increase among the top 25 foreign destinations, with Miami ranking 2nd at an expected 5% increase in prices, followed by Los Angeles, Paris, and New York.
Similar to this forecast, Dubai has also ranked high among the top locations for branded residences. The United Arab Emirates was followed by South Florida and New York City, ranking second and third, respectively, in the list. High-end properties and branded residencies are in demand among both domestic and international buyers for business and cultural activities.
The “Dubai Effect”
Promising ROI has been one of the main reasons driving investors to choose the Emirates as a home and an ideal investment destination. However, this “Dubai Effect” goes beyond just ROI. It comes with the impact of good leadership, the efforts of the government, the safety of the nation, economic stability, the neutrality and inclusion of the policies, and most importantly, the opportunities for growth potential this city has to offer. The convergence of all this in ‘one platform’ is what makes the ‘Dubai offering’ stand out in what seems to be a troubled world since 2022.
Never Too Late To Invest In Dubai
The good news is that despite the surge in demand, prices are still reasonable and payment plans remain feasible for most investors. These are all signs of healthy growth, which is key to reducing the impact of long-term price fluctuations because of the cyclical nature of the real estate sector.
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