Real estate transactions in Dubai climbed 29% y-o-y in 2023 to a record 118.2k units, surpassing the 100k mark for the first time, according to the latest real estate service provider Savills’ Dubai Property Market report (pdf). Activity levels more than doubled since 2021, when the volume of transactions covered just 55.5k. This came as new project launches rose 90% y-o-y.

Investor demand > end-user demand: More than half of units sold during the year were off-plan, which Savills says indicates heightened interest from investors and subsiding demand from end-users.

ICYMI- Real estate services firm Cushman and Wakefield also recently said that the increase of investor demand in the market points to waning affordability and subsiding demand from end users. The company’s analysis — along with that of several other pundits — for 2024 was that rising prices could begin to moderate amid an increase in supply and limited availability of post-handover payment plans.

Apartments were the most popular units during the period, accounting for 78% of transactions in 2023, while the demand for villas and townhouses remained stable, the report adds.

Property value is on the up: Property capital value in the emirate climbed 11.2% y-o-y, Savills said, adding that this is led by units close to transport and business networks. Apartment units climbed 20% y-o-y in value, while the capital worth of villas and townhouses rose 22% y-o-y. High-end villas and townhouses only saw a 5% y-o-y increase in value.

Market activity was concentrated in Dubai’s South East, which accounted for 52% of total units sold. Jumeirah Village Circle, Dubai Sports City, Arabian Ranches, and Dubai Hills Estate saw substantial demand, Savills said. Demand was also strong in Business Bay and Downtown Dubai in Central Dubai, as well as Palm Jumeirah and Dubai Marina west of the city.

The luxury segment saw a sharp increase in demand, with the number of transactions growing 63% y-o-y, led by units in Palm Jumeirah, Dubai Harbour, Jumeirah Beach Residence and Jumeirah Bay Island.

The office segment also saw increased demand during the year,owing to new market entries from the Americas, Russia, India, an expansion of Dubai’s non-oil sector and government initiatives to streamline doing business. Green-certified offices were in high demand during the year as businesses look to make operations more sustainable, the report said.

Primary renters of office spaces included law firms, wealth management companies, fintech, tech, media, and telecom companies. Rent in office units in the high-demand DIFC inflated 22% y-o-y.

The industrial sector also saw robust demand throughout the year on the back of growing interest in the non-oil sector, as well as more warehouse expansions and interest in sustainable warehousing, the report adds. Oil and gas players, however, were the leading occupiers in warehousing and industrial space despite strong demand from family offices, investment funds, and high-net-worth individuals. Some 650k sqft of under-construction Grade A space is slated for handover in 2024, the report added.

Demand for micro-markets drove rentals up, with prices inflating 16.7% y-o-y in Dubai Industrial City and Jebel Ali Industrial across grade A assets, 7.1% y-o-y in Dubai South, 14.3% y-o-y in Dubai Investment Park, and 8.3% y-o-y in Al Quoz.

IN OTHER DUBAI REAL ESTATE NEWS-

Proof the Dubai property craze is far from over: Government-backed real estate giant NakheelProperties sold all houses in the first two phases of its new Bay Villas development on Dubai Islands after hundreds of buyers queued overnight outside the developer’s office, Bloomberg reports. The project boasts around 500 homes with prices ranging between USD 1.2 mn and USD 4 mn.

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