We are delighted to release our Market Insights Report for Q3 2023.
As one of Dubai’s largest and most well-established real estate brokerages, we believe that our market observations can be of huge benefit to anyone with an interest in the Dubai Real Estate market. We have always been a proponent of market transparency. It not only significantly increases the decision-making capabilities of our clients and brokers, but it also enhances market-wide trust – an essential ingredient that is necessary to attract the increased levels of capital required to foster the growth and development of Dubai.
Furthermore, market transparency helps to create a more efficiently priced market which mitigates risks associated with the boom/bust cycle. Over the last 10 years, the Dubai real estate market has taken notable steps towards mature market status. We are proud to have played a role in this progression, particularly with regard to the increased levels of market insights now offered by market participants such as Espace Real Estate.
Our report stands out by concentrating solely on the residential sector, providing a detailed examination of the Villa, Townhouse, and Apartment market. Insights into the commercial and land market have been intentionally excluded. This report, therefore, serves as a comprehensive study of the Dubai residential sector, with an emphasis on community-specific insights.
Observations from the report are as follows:
The market remains extremely active with a YoY and QoQ increase in the number of properties being purchased.
The secondary market transaction value and volume on a QoQ basis show accelerating growth when compared to the 12-month YoY growth rate.
The off-plan market has experienced softer conditions, with a 1% QoQ reduction in transaction volume. I consider this to be a healthy sign for the market as reduced levels of speculative demand (albeit moderate in nature) should result in more modest supply-side conditions. This will help to prevent the market from becoming saturated in years to come.
Villa communities tracked in this report have seen a YoY reduction, with 9 out of 13 communities showing reduced levels of transactions on a YoY basis for Q3. The opposite trend is noted in the apartment market, with the majority of communities tracked in this report showing increased transaction levels. With a valuation gap widening between the villa market and the apartment market over recent years, it is natural to see demand gravitate towards the more tangibly priced market. This is the ripple effect taking place.
There are notable YoY reductions in rental contracts being signed across most communities tracked. As rent prices have continued to rise, demand has been pushed out to many more affordably priced communities. Reduced levels of rental transactions also indicate an ongoing trend of this cycle, with many tenants opting to buy instead of rent.
The villa market continues to experience greater increases in rent prices when compared to the apartment market, further widening the gap between these two markets.
In the 7 apartment communities tracked in our report, the average percentage increase in rent prices is +16%.
In the 13 villa communities tracked in our report, the average percentage increase in rent prices is +21%.
Espace continues to experience an increase in the growth rate of buyer registrations that outstrips the growth rate of new listings in our sales department.
The average sales price of properties sold by Espace has increased by +14% on a YoY basis.
VILLA/TOWNHOUSE MARKET Q3 YoY TRANSACTION VOLUME
APARTMENT MARKET Q3 YoY TRANSACTION VOLUME
RENTAL Q3 YoY TRANSACTION VOLUME
RENTAL Q3 YoY TRANSACTION VOLUME
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