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Real estate experts have released the first forecasts of Dubai market for Q3 2023. The prevailing opinion is that the real estate market will continue to grow. Moreover, analysts were able to identify several particularly promising areas.
Two key factors will be financial accessibility and a constant influx of people to the Emirate. Both factors have a significant impact on real estate prices, maintaining demand and increasing the number of potential buyers.
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Financial inclusion
Access to a diverse range of financial services in 2023 plays an even more significant role than is usually the case in the real estate market. Due to the growth of rents, more and more residents of Dubai are considering the option of buying a property, for which they have to resort to the services of banks.
Despite the fact that the global increase in interest rates affected Dubai, the UAE economy turned out to be much more stable than most countries in the world. Analysts note that political stability and a number of government support measures contributed to this.
As a result, Dubai turned out to be a “safe haven” for investors and buyers. This ensured a stable inflow of foreign capital into the real estate market, which remains one of the key non-oil sectors of the emirate's economy, along with tourism.
Population influx
According to Dubai Statistics Center, by July 2023, the population of the Emirate reached 3,604,030 people. This is 88,766 more people than in July 2022.
The population influx caused an increase in demand for real estate, which naturally led to an increase in prices. At the same time, the government of Dubai announced the expansion of public beaches by 40% for the comfort of local residents. Another innovation is the expansion of the area of reserves by 60% by 2040; eventually 60% of the territory of the emirate will be allocated to reserves.
According to the idea of the authorities, following the principles of sustainable development and expanding infrastructure should attract more and more foreigners to the emirate. By 2040, the authorities plan to increase the local population to 5.8 million people.
Another important factor is an increasing number of representative offices of foreign companies, which is why the demand for commercial real estate is growing. Foreign companies like a soft tax policy, developed infrastructure and access to the fast-growing markets of the Middle East and Asia. Since all foreign employees need properties, it further increases the demand for residential real estate - both for rent and for purchase.
As a result, the Dubai real estate market is resistant to any challenges and is ready for further growth, experts say.
Price trends
In addition to key factors, analysts also identify several districts of Dubai, apartments in which can become a very profitable investment. At least, at the moment, it is here that the strongest growth trends are noticeable. There are new districts:
- Dubai Production City: in three months, the price increased by 23%, reaching AED 8,008 ($2,180) per square meter by July;
- Living Legends: the price increased by 21%, reaching AED 7,502 ($2,042) per square meter.
Meanwhile, there are the most popular areas:
- Al Habtoor City: the price increased by 13%, reaching AED 22,152 ($6,031) per square meter;
- Bluewater's Islands: the price increased by 10%, reaching AED 43,529 ($11,851) per square meter.
If we take the segment of villas and townhouses, then over the past three months prices have grown the most in Jumeirah Islands - an increase of 13%, reaching AED 21,592 ($5,878).
Despite the increase in prices, the number of transactions continues to grow. According to Dubai Land Department, the number of transactions in the second quarter of 2023 exceeds the number of transactions in the second quarter of 2022 by 57%.
As a result, the Dubai real estate market will continue to grow rapidly, providing a variety of opportunities for both buyers and investors. And while new areas are rapidly growing in prices, already formed territories offer profitable investment opportunities.
