The property market in Dubai: February 2023
Are you thinking of investing in Dubai to build up a property portfolio? Would you like to get started in the residential property market or buy a property to let?
You want to get a clear picture of the current state of the property market so that you can make an informed decision. Here’s a summary of the state of the property sector in Dubai for the month of February.
You’ll find some very specific details, including average sale prices for flats and villas, the number of transactions completed, the districts in the Emirate of Dubai with the highest number of property sales, and so on. Read on to find out more.
The Dubai property market in February 2023: the statistics
As 2023 gets underway, the property market in Dubai is performing very well. This is according to recent trends published by the Dubai Land Department (DLD), the city’s land authority.
In February, the number of sales rose sharply, as did prices. Indeed, driven by strong demand from both the rental market and those looking to buy their own homes, the Arab emirate recorded a total of 9,000 property sales.
Compared with February 2022, February 2023 saw an unexpected performance, with an impressive 42% rise in the number of property sales.
To go into more detail, there are far more flats being sold, largely due to the low demand for detached houses.
Consequently, property transactions involving flats rose by 56% compared with the figures for February 2022.
As for villas, there has also been a 16.4% increase in the number of sales compared with last year, although this rise is not quite as impressive as that for flats.
That being said, let’s talk about average property prices.
Average property prices in Dubai in February 2023?
As regards trends in average prices, February 2023 saw a level of performance not seen in Dubai for 10 years.
In fact, average flat prices in the emirate stood at 1.1 million dirhams, representing an increase of 6.8% compared with February 2022.
As regards villas, the average price has risen by 24.5% compared with February 2022. Average purchase prices stood at 2.5 million AED.
In total, the total value of property sales in Dubai for February 2023 amounted to nearly 27 billion dirhams. Compared with last year’s figures, February 2023 saw a 64% increase in the value of property sales.
To put it simply, we should not expect property prices in Dubai to fall in 2023.
And if you’d like more details, you should know, amongst other things, that nearly 59% of property sales in February 2023 were off-plan sales.
Sales of completed properties therefore accounted for only around 41% of total sales.
It seems that the supply available on the secondary market was not sufficient to meet the total demand for property in the Arab emirate during the month.
Investors therefore had no alternative but to buy into projects currently under construction offered by the estate agents.
The Dubai neighbourhoods most popular with investors in February 2023
According to figures published by the Dubai Land Department, five neighbourhoods in Dubai are particularly attractive. If you have sufficient savings, you might want to consider these neighbourhoods. They are:
The Jumeirah Village district, which recorded 927 sales totalling 717 million AED; ;
The Business Bay district, which recorded 772 sales totalling 1.32 billion AED; ;
The Dubai Marina district, which recorded 744 sales worth 2.68 billion AED; ;
The Damac Lagoons development, which recorded 424 sales worth 1.3 billion AED; ;
The Dubai Creek Harbour district, which recorded 377 sales totalling 830 million AED.
Should you invest in the property market in Dubai in 2023?
Whilst investing in major cities has always been an excellent idea due to low mortgage rates, Dubai stands out because of its unique status. And it is not just because of its favourable tax regime.
Indeed, it is one of the few major cities where new-build properties are still available. Property developers continue to launch new-build property developments, which enables foreign investors to invest in new-build properties and expect substantial rental income.
At a time characterised by significant inflation and considerable economic uncertainty, investing in property in Dubai will enable you to realise better capital gains on your property purchase.
Although it is also possible to invest in older properties, the rapid rise in prices for new-builds offers the prospect of a very high rental yield, particularly as rents for new-builds are often very high. The city attracts only buyers with high purchasing power.
Furthermore, the city’s extensive infrastructure is driving up property values in this Arab emirate. All you need to do is find the right property and act at the right time. You have the opportunity to’investing in flats or in villas, depending on the nature of your property project.
Flats offer more attractive rental returns, as it is easier to find tenants and buyers. However, with detached houses, it is possible to realise much more substantial capital gains.
