Dubai Real Estate Market Forecast for 2023
The forecast for Dubai real estate market is set for 46% growth in 2023, data shows.
In 2022, the real estate market in Dubai experienced another booming year, breaking transaction records and pushing luxury real estate prices to all-time highs. However, the situation is drastically different in most of the rest of the world.
Reuters in December reported that property prices in the US are predicted to decline by 12% in 2023, while Bloomberg projected that prices in the UK may decline by as much as 30% by 2024.
But how long can Dubai real estate market defy the trend as the world’s economies weaken and is heading toward a recession?
Compared to the crisis in the real estate market in 2009, Dubai is a totally different prospect. And by comprehending what is driving our market and the downturn elsewhere, we may start to anticipate that this time, the story for Dubai will be written differently.
The value we all placed on homes as places where we not only lived, but also worked, exercised, and received an education, surged throughout the Covid period, which was good for the world’s real estate markets.
Populations moved from cities to larger, rural properties as a result of remote working.
Rising interest rates can hurt the real estate market, and this trend has caused a slowdown in property sales in the US and Europe. However, Dubai is less affected by these rate increases because many property purchases there are made with cash and the city benefits from high oil prices.
In the US and UK, cash buyers make up 22% and 31% of property purchases respectively, but in Dubai, cash buyers make up more than 70% of purchases on average.
Trends in Dubai’s Real Estate Market in 2023
Check out how Businessbay led the Dubai Real Estate Market transactions in 2022.
Despite the rate increases, the real estate market in Dubai has remained steady and transaction volumes have not been affected. It’s possible that the rate of increases will slow down in 2023 and some increases may even be reversed if the US goes into a recession.
The UAE has successfully positioned itself as a safe place for people and investment during the pandemic, resulting in a renewed influx of migration to Dubai. This trend is expected to continue throughout 2023 and beyond due to global factors such as rising taxes and luxury home buyers set to increase in 2023.
The UAE has made efforts to attract these migrants through visa and business reforms. Dubai is expected to be the top destination for wealthy migration in 2022, surpassing the US, according to a global citizenship company.
Additionally, with the opening of China in 2023, there is also expected to be an increase in tourists and residents coming to Dubai. As a result, Dubai’s population is predicted to grow from 3.5 million to 5.9 million by 2040, with an estimated 110,000 new residents per year.
It’s important to note that the Dubai real estate market today is more regulated, diverse, and mature compared to previous market highs.
Dubai’s Real Estate Market Benefits in 2023
Dubai offers many benefits to its residents such as high-quality education, healthcare, long-term visas, and a high rate of homeownership. The city’s economy is expected to grow at a rate of 7.6% this year and 4.1% in 2023, according to the World Bank.
The real estate market in Dubai is considered stable, with no signs of a “bubble” as prices have not risen dramatically. In fact, prices remain below 2014 levels and have remained steady for the past three quarters.
The luxury market is experiencing growth, but this is a common trend in mature markets. Prices in Dubai have risen over the past two years, but they still offer good value for investors with average rental yields at 6.5%.
According to the UBS Bubble Index 2022, Dubai is one of the best-value global markets for investors. The city’s real estate market is expected to continue to perform well over the next 18 months, and Dubai has been a beneficiary of the pandemic and global uncertainties, attracting new residents and investors. 2023 is likely to see a continuation of these trends.
Check out the trending properties in Dubai Real Estate Market in 2023