Espace Real Estate's recent report sheds light on the factors contributing to its impressive 46% revenue growth in 2023. By analysing the last six months across 30 communities in Dubai, focusing on the residential sector, the report provides key insights.
AFFORDABLE COMMUNITIES ON THE RISE
Dubai's more affordable neighbourhoods are becoming more popular due to inflated prices in established areas. In areas like Palm Jumeirah and Dubai Hills, villa and townhouse transactions declined. But, communities farther from the city, like Mira and Mudon, saw increased activity.
Sales figures overview
Total Property sales transactions, including off-plan and secondary markets, hit AED 178 billion. This marks a 47% rise compared to the same period in 2022. Specifically, the off-plan market had a 39% increase in transactions, while the secondary market saw a 21% increase.
VARIED TRENDS ACROSS COMMUNITIES
In the apartment sales market, The Views, Greens, Downtown Dubai, Jumeirah Lakes Towers, City Walk, and JVC had more sales. Yet, Palm Jumeirah, Dubai Marina, JBR, Emaar Beachfront, and Bluewaters Islands had fewer sales.
Luxury market dynamics
Transactions above AED 20 million soared by 40%, indicating a notable surge in luxury real estate activity. The average sales price in H2 2023 was AED 7,125,426, up 28% from H2 2022. The UK led buyer nationalities, followed by India, France, Russia, and Egypt.
RENTAL MARKET HIGHLIGHTS
Rental prices went up in most communities surveyed, but not in Arabian Ranches 3 and Emaar Beachfront. Villas in Jumeirah Golf Estates saw a significant 90% increase in rental prices. Then Jumeirah Islands and Emirates Hills followed with 45% and 44% increases in rental prices, respectively. In the apartment category, Bluewaters Island experienced the highest rental rise at 74%, and Palm Jumeirah followed with a 21% increase.
Dubai's Palm Jumeirah aerial scenic view
Rental transaction volume dynamics
In 25 out of 30 communities, the number of rental transactions went down. This happened because prices were high, causing less activity in the market. Yet, some areas like Dubai Hills (up 5%), Arabian Ranches 3 (up 50800%), Emaar Beachfront (up 118%), and Bluewaters Island (up 20%) saw an increase.
BUYING VS RENTING: CASE STUDY
Increasing rental prices are prompting tenants to consider homeownership. A notable example involves a family transitioning from Dubai Marina to Villanova. By investing AED 550,000 in an AED 2.4 million townhouse, their mortgage payments became cheaper than rent, allowing them to upsize to a 3-bedroom villa.
PREDICTIONS FOR THE FUTURE
John Lyons, the Managing Director of Espace Real Estate, predicts rising property values in more affordable neighbourhoods. This could narrow the gap with well-established but pricier communities. But he highlights how competitive mortgage rates and decreasing interest rates offer an advantage; they make buying a home more achievable.
In short, changes are happening in the Dubai real estate market. Affordability is now a major factor in both buying and renting properties. Established and emerging communities are altering the landscape, creating fresh chances for investors and homebuyers.
