The property market in Dubai: January 2023
Are you thinking of investing in the property market in Dubai in 2023, but still have some doubts? Are you unsure whether you have all the information you need to make sufficiently informed investment decisions?
This article is for you! Find out here how the property sector in Dubai performed in January 2023.
First week of January 2023: A strong start for the property market in Dubai
The property sector in Dubai continues to grow, having got off to a very good start in 2023. If you’re planning to buy a new-build property, it’s best to do so before property prices rise any further.
Indeed, according to figures published by the Dubai Land Department, the total value of property transactions in the emirate had reached 10 billion AED in the first week of the year alone, equivalent to 2.72 billion dollars.
To give you an idea of how prices have changed, in Marsa Dubai and Al Thanyah Fifth – where the highest number of transactions was recorded, for example – plots of land were sold for 623 million AED (equivalent to 170 million USD) and 77.23 million AED (equivalent to 21 million USD) respectively.
In the first week of January 2023, 270 plots of undeveloped land were purchased, whilst 1,907 flats and villas were sold for a total of 4.89 billion AED, equivalent to 1.3 billion USD. This is a better performance than that of the last week of December 2022.
It is worth noting that over the past week, 170 undeveloped plots were sold, whilst transactions involving villas and flats totalled 5.64 billion AED, or 1.5 billion AED.
Thus, this steady trend in transaction volumes and property prices since the first week of January 2023 speaks volumes about the level of rental returns the city offers to buyers and investors.
January 2023: An overview of the property market in Dubai
The positive start seen in Dubai’s property market during the first week of January 2023 has further boosted property purchases and investment projects in the city.
Thus, from January 2022 to January 2023, average prices rose by 10.6%, with the sharpest increase recorded for villas, where the average purchase price rose by 12.9%. There was also a 10.3% increase in the average purchase price of flats over the same period.
In January 2023 alone, the Dubai Land Department recorded 9,229 property transactions, representing an increase of nearly 69.2% compared with the number of sales recorded in January 2022.
For January 2023, the average rent for a flat to let in Dubai is around 98,307 AED (26,800 USD), whilst villas are let at an average price of 290,242 AED (USD 79,000).
Per square metre, the average cost of a flat in Dubai was 1,196 AED, or 330 USD, whilst a villa cost around 1,411 AED, or 390 USD per square metre.
Although these figures are encouraging for estate agents and investors, these sale prices and rents have still not reached the record levels seen at the end of 2014. The price of a flat in January 2023 is still 19.6% lower than in 2014, whilst that of villas is 2.4% lower.
In other words, there is a ceiling that has not yet been reached and which may be reached this year or later. If you’re thinking of getting into residential property or rental property investment in Dubai, now might be the time to start building up your property portfolio.
Whatever the nature of your property project, you will find a range of property types to suit your needs.
Why invest in property in Dubai in 2023?
Given the excessive volatility in share prices in recent times, most investors prefer to invest more capital in rental property.
In particular, the decision to buy property in major cities for rental purposes is justified by rental demand and rental yields, which are generally above average.
Furthermore, the current trend suggests that price growth in both the residential and rental property markets is set to continue. So, if you are looking to invest in apartments or villas to let, Dubai offers the guarantee of stable income, high rents and very attractive capital gains on resale.
One need only look at the dynamism of the property sector, the numerous new-build developments and the massive hotel complexes that are constantly springing up across the city.
Indeed, Dubai almost always has a supply of new-build properties, which is not the case in most of the French property sector.
The Arab emirate also offers foreign investors very attractive tax and administrative benefits, with a rent control policy that is more favourable to property sales.
That said, make sure you invest wisely – in the right neighbourhood, at the right time, and with the right estate agent – to maximise your chances of finding tenants more quickly. Above all, you need to identify the right time to invest. And that time is undoubtedly now.
