Dubai Full Year Market Report for 2022

Richard Waind, group managing director, summarises the performance of Dubai’s real estate market in 2022, in Betterhomes’ Dubai Real Estate Market Report for 2022

What a year 2022 was for the Dubai real estate market. A new record was set for the volume and value of residential transactions, new heights were reached for luxury homes, and Dubai confirmed its status as the number one destination for global citizens seeking safety, opportunity, and an unrivalled lifestyle.

After the initial surge we witnessed in 2021, the market started to show signs of stabilisation in 2022. As we enter 2023, we can be confident that the outlook looks healthy. The volume of transactions for ready units was consistent over the last three quarters, and the pace of price increases has slowed to sustainable single digits. The Dubai Land Department (DLD) ushered in an era of greater transparency with the Open Data initiative, and the high prevalence of end users and resident buyers gives confidence about the long-term stability of the market.

Looking ahead to 2023, we can expect more of the same. Supply of both new and ready property will remain constrained, while Dubai is likely to continue to attract new residents and investors, ensuring transactions remain strong. Interest rates are likely to remain at current levels, or slightly higher, for at least the first half of the year, which will impact affordability and keep sales prices in the secondary market in check. The off-plan and luxury markets are likely to remain on an upward trajectory as new launches fill the gap created by the current lack of ready property.

High rates of renewal and low rates of transiency in the face of rising rents will keep rental inventories low again in 2023. Coupled with a growing population and a lack of new homes being delivered, we can expect further rises in rents. This will be welcome news to investors who have seen average yields rise to 6.5%, and it is likely to result in greater tenant demand for more rural periphery communities in the coming months.

TOTAL VALUE OF SALES TRANSACTIONS (OFF-PLAN VS SECONDARY), AED BILLIONS TRANSFERRED OFF-PLAN