Dubai – October 11, 2023 – In September 2023, a total of 7,523 transactions were recorded in Dubai’s residential market, registering a decline of 8.3% compared to a year earlier. This slowdown in activity levels has been underpinned by a drop of 41.5% in off-plan market sales, whereas secondary market sales increased by 30.5%. In the year to date to September 2023, the total transaction volumes reached 87,154. This is the highest figure registered over this period and despite the slowdown seen in the last month, we expect that the 2023 total will surpass the 92,144 registered in 2022.
In the year to September 2023, average prices in Dubai increased by 19.6%. Over this period, average apartment prices increased by 19.7%, reaching AED 1,357 per square foot, and average villa prices increased by 18.9%, reaching AED 1,605 per square foot. The average apartment sales rates across Dubai are still below the record levels witnessed in 2014 by 8.8%, although several key residential areas have long outperformed their 2014 benchmark. Average villa sales rates currently sit at 11.1% above their 2014 levels.
Downtown Dubai registered the highest sales rate per square foot in the apartment segment of the market, reaching AED 2,453, whilst Palm Jumeirah registered the highest sales rate per square foot in the villa segment of the market, reaching AED 4,995.
In the rental market, a moderation in the rate of growth continues to be seen, where in the 12 months to September 2023, average residential rents increased by 20.6%, down from the 21.7% growth registered a month earlier. Over this period, average apartment and villa rents rose by 20.7% and 20.1%, respectively. The average annual apartment and villa rents reached AED 108,606 and AED 322,750, respectively, in September 2023.
The highest annual apartment and villa rents were respectively found in Palm Jumeirah, with average asking rents at AED 257,366, and in Al Barari, with average rents at AED 1,098,788.
Taimur Khan, Head of Research – MENA at CBRE in Dubai, comments:
“Dubai’s residential market ended the third quarter of the year by notching up another record, where the total volume of transactions in the year to date reached 87,154. This marks the highest total ever recorded over this period and an increase of 35.4% compared to the previous year. That being said, a slowdown in demand levels has been witnessed on a monthly basis following a decline in off-plan sales, particularly within a number of core residential areas that significantly underperformed their average for the year. This can be largely attributed to the limited supply coming into the market.
In the rental market, despite demand remaining elevated, the rate of rental growth has contracted every month this year to date. Over this period, a number of listings in several residential communities registered a reduction in their rental rates, including Business Bay, Downtown Dubai, Dubai Marina, and Palm Jumeirah. In the year to date to September 2023, asking rents of 22.6% of the overall residential listings within those four areas have actually decreased.
