Many people call Dubai the “City of Tomorrow”, and there are really a lot of reasons for this. This city is considered to be one of the most interesting places in the world. Millions of people come here every year for both recreation and permanent residence. The real estate market is actively developing, with developers giving priority to elite properties in Dubai in 2023. Today, many investors and guests of the resort are interested in: what awaits the Dubai real estate market in 2023? Let’s have a look at some forecasts.
2022 results
According to statistics, Dubai real estate prices increased markedly by the end of 2022, but did not reach peak values, as they did in 2014. The cost of apartments has risen by 8.5% since January, and the cost of villas - by 13%. If we take into account the average price per square foot, we can see the following values: 1149 AED ($312) and 1359 AED ($370) respectively.
- The most expensive apartments are offered in the Jumeirah area, and villas - on Palm Jumeirah.
- In September 2022, an important deal was concluded: a land plot on the famous paradise island was bought for 600,000,000 AED (more than $163 million).
- A couple of weeks before that, the most expensive villa in Dubai was purchased here. Its cost was 302,000,000 AED.
Such deals show that rising prices do not stop potential buyers. This is due to exclusivity - there are not so many such offers, so the demand for them is only increasing. In addition, the influx of wealthy investors was also attracted by the golden visa - after all, most often foreign citizens purchase luxury real estate. Some of them need it for permanent residence, others for renting out.
ROI income can be substantial. A recently purchased villa on Palm Jumeirah was rented out during six months for AED 4,000,000 (just over a million US dollars). If we calculate the annual cost, we get a new record in the amount of income from renting Dubai property. The previous record set in 2021 was AED 7,500,000 per year. This revenue was brought by a villa located in the Emirates Hills.
More affordable type of housing - apartments - were also in great demand. And in 2022, their sales reached record levels. A significant increase in rent stimulated the purchase of real estate. Peak values were recorded in August: the average price increased by 24.9% compared to the beginning of the year.
In the same period, its maximum values also extended to elite housing. The cost of renting villas out increased by 24.2%. In the remaining months until the end of the year, there were no significant price hikes in the real estate rental sector.
What analysts say about the real estate market in 2023
2021 and 2022 were significant periods for the Dubai real estate market: almost every month, experts reported setting new records in transaction value and volume. 2023 has just begun, but experts have set a new record - the sale of a luxury penthouse for $111 million.
Of course, this record will definitely be broken: moreover, there is still a lot of time until the end of 2023. However, it showed an excellent start for the real estate market and became another confirmation of the interest of investors in luxury properties in Dubai.
Property prices in Dubai are expected to continue rising in 2023. This is due to the introduction of the golden visa, a preferential program for foreigners in one of the most prosperous cities in the world. According to experts, the average cost of real estate can increase up to 20% per year. If we are talking about luxury housing, the price per square foot can grow by 13.5% during the year.
Despite such a high rate of appreciation, demand for them should remain just as high.
Analyst company Knight Frank believes that in 2023 Dubai will show the highest growth rates in property prices in the world.
According to experts, the city will be able to get ahead of today's leaders - Miami and Paris. It is predicted that by the end of 2023 the cost of luxury properties will increase by about 50% compared to 2021. However, even with this rate of increase, luxury housing in the emirate is still considered one of the most affordable in the world.
Apartment prices in 2023 could rise by 20% within a year. Most likely, this will be due to increased demand for housing and continued growth in rents. With an unstable world economy, the influx of foreign citizens to the emirate will increase. The government only stimulates and encourages this: today, almost any foreigner can apply for a residence permit without any problems. Of course, this has a positive effect on the country's economy.
According to the forecasts of the Central Bank, in 2023 the UAE will experience economic growth of up to 3.9%. At the same time, tourism, property, hotel business and transport will remain the main profitable areas.
Summing up
The Dubai real estate market attracts the attention of millions of buyers. 2022 saw a peak in sales of properties, but even despite a significant price increase, the number of transactions increased significantly compared to 2021. This was facilitated by various factors: a simplified visa system, an increase in rent, an unstable situation in the world.
According to the forecasts of leading analysts, in 2023 housing prices in the emirate will continue to grow. So, according to experts, on average they can increase up to 20%. If you believe the assumptions, then the best period for buying a home is the first half of the year, and by the end of the year prices will become noticeably higher.
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