In spite of unpredictable conditions and changes in customer behaviour, 2022 was incredible for Dubai’s real estate sector. In fact, in 2022, the value of deals crossed half a trillion dirhams for the first time ever, according to Dubai Media Office. Such a tremendous spike in demand is attributed to the new initiatives introduced by the Dubai Land Department (DLD) to protect investor rights and the Golden Visa amendments, among other factors. Judging by the current performance, the real estate market of Dubai will keep trending in 2023, both in terms of residents and foreign buyers. In this article, we will outline the results of the previous year (2022) and the forecasts from the experts regarding the property sector in 2023.

Key Moments of Dubai's Real Sector in 2022

The year 2022 was very productive for the local real estate sector in terms of new initiatives, which aim to bolster the performance and attract new investors. A few of the key events that took place during the year can be found below:

<ol><li>On October 3rd, the <a href="https://metropolitan.realestate/media/news/the-latest-uae-visa-amendments-explained/">UAE visa overhaul</a> took place, where the previous minimum qualifying amount for a 10-year Golden Visa was decreased to AED 2M (USD 545K) from AED 10M (USD 2.7M). As a Golden Visa holder, you have the opportunity to sponsor not only your family, but also an unlimited number of domestic staff, provided they have a license.</li><li>The DLD and the Dubai Municipality (DM) joined forces to bolster the competitiveness of Dubai’s property sector and boost operational efficiency by a whopping 20%.</li><li>A few of the leading Dubai developers, including DAMAC Properties and Nakheel, started accepting cryptocurrency as property acquisition pay</li><li>The DLD signed a Memorandum of Understanding (MoU) with Property Finder, Bayut and DXBinteract.com, in which the 3 companies now provide detailed data regarding the Dubai property sector. This way, buyers can easily learn more about the property prices by area, oversee the stages of construction, rental yields and much more.</li></ol>

<ol><li value="5">Metropolitan Premium Properties, in collaboration with Mallorca Properties, managed to close the single <a href="https://metropolitan.realestate/media/news/three-land-plots-sold-in-dubai-for-a-record-aed-690m-usd-187-6m/">biggest residential land transaction in 2022</a> by selling 100,000 sq. ft of seafront plots in Dubai Marina to an undisclosed developer.</li><li>According to Khaleej Times, the General Directorate of Residency and Foreigners Affairs (GDRFA) in Dubai issued a total of 79,617 Golden Visas in 2022, which is 32,467 more long-term residency visas than the previous year, which is an increase of a thumping 69%.</li><li>The DLD launched a strategic plan for 2026, which will be implemented in 3 stages; to empower Dubai as the world leader in property investments and increase the contributions of the real estate sector to the emirate’s GDP.</li></ol>

NBD! Thanks to the new service launched on January 11th, 2022 by the GDRFA, you can now apply for a Golden Visa or complete any procedure in terms of long-term residency permits via the GDRFA website within just 5 minutes via video chat with an immigration agent or officer. Taking into account the initiatives launched during last year (2022), it is not surprising that Dubai recorded a 76.5% growth in sales compared to 2021, with an overall value of AED 528B (USD 143.7B), as revealed by Dubai Media Office. The number of transactions amounted to 122,658, which is a 44.7% increase from 2021. The sales were boosted by the extraordinary demand from Russian, Ukrainian, Asian, European and American investors, in particular HNWIs. As stated by the Dubai Media Office, in 2022, the real estate sector witnessed the completion of 55 projects worth AED 3.2B (USD 871.2M), which is a growth of 57% in numbers and 8% in value, in comparison with last year. In fact, property developers offered a thumping 50,000 new residential units, the highest since 2008. At the moment, there are more than 350 projects under construction, making Dubai one of the leading property destinations worldwide. Among the ongoing projects, it is worth mentioning the Dubai Islands, the World Islands and Lanai Island, just to name a few. As reported by DXBinteract.com, 34,000 units have marked their 70% completion stage and are due in 2023.

Real Estate Sales in 2022

According to DXBinteract.com, sales of the off-plan market grew by 100%, with over 52,000 deals worth more than AED 124B (USD 33.7B). Such astonishing indicators are attributed to a variety of flexible payment plans and lucrative yields from off-plan sales. It is worth noting that lately privacy and space are of great importance to homebuyers, which is why many individuals have decided to sell and switch to bigger properties. Additionally, a high number of tenants turned purchasers in order to benefit from low interest rates amidst increased rental prices in the emirate. Sales of ready properties rose by 30% to reach 45,200 properties valued at AED 140B (USD 38B). Ready homes in Dubai carry price tags that are 14-30% lower than recent launches as a result of the inflation cost on construction materials and increased quality of features and amenities. Luxury properties witnessed an increase of 97% in value and 85% in volume thanks to a considerable influx of wealthy individuals and undersupply of upscale units at the same time. There are approximately just 300 villas and 80 apartments, both off-plan and ready, which exceed the price of AED 40M (USD 10.9M) currently in Dubai. Most of them are situated in MBR City, Emirates Hills and Palm Jumeirah. According to the DLD, the local real estate market witnessed an increase of female investors of up to 50.8% from 2021. That being said, there were 33,419 property investments recorded by women in 2022, valued at over AED 58.8B (USD 16B). A growing number of female investors illustrates the vision of the UAE leaders to encourage women to take part in different spheres of life and economic sectors. The most popular Dubai areas for apartments were Business Bay, Dubai Marina, Jumeirah Village Circle, Al Merkadh and Downtown Dubai. At the same time, villas were in the highest demand in DAMAC Lagoons, Al Furjan, Dubai South, DAMAC Hills 2, and Villanova. As revealed by DXBinteract.com, Jumeirah Bay and Bluewaters Island registered 100% and 50% growth in the price per sq. ft respectively, which showcases the great investment potential of these 2 neighbourhoods. NBD! In 2022, Bluewaters Island witnessed the launch of Bluewaters Bay by Meraas, which offers stylish 1–4 bedroom apartments and a limited collection of exquisite penthouses for acquisition. Among the exciting amenities there will be a resort-style infinity pool, an observation deck and a tennis court, just to name a few.

Rental Property Market in 2022

According to Bayut & dubizzle, budget-friendly apartments witnessed an uptick of up to 24%, whilst the rental value of luxury units grew by 24–54%. When it came to villas, affordable properties recorded a growth of 2-23%, whereas rental rates for prime units increased by a whopping 54%. The most popular budget-friendly accommodation options included Jumeirah Village Circle and Bur Dubai for apartments, whereas affordable villas were in great demand in DAMAC Hills 2 and Mirdif. In the upscale segment, Dubai Marina and Business Bay maintained their leading positions, and Al Barsha and Jumeirah were popular with those seeking to rent high-end villas. If you are interested in buy-to-let properties, you will be keen to learn that Dubai International City offered an impressive ROI of 9.22% for affordable apartments last year (2022). At the same time, Dubai Marina is a worthy option for investing in luxury apartments, since it offered a 7.04% rental yield – the highest in Dubai. The most attractive rental returns for budget-friendly villas/townhouses were recorded in Jumeirah Village Circle, with 6.9%, while DAMAC Hills had the highest project ROI of 6.95% for upscale villas. As a result of an influx of HNWIs, the upscale market is set to witness higher rental values, since the supply is insufficient to satisfy the demand. Most of the upcoming handovers are located in affordable areas, and there will be very few villa/townhouse communities completed this year. As a result, rental rates of well-located properties, especially larger ones, will continue to grow during this year (2023), and in particular, beachfront units, residences with skyline views and gated communities will be in strong demand. NBD! In this article, you can get acquainted with the top neighbourhoods in Dubai to rent a villa. Among these are Palm Jumeirah, Al Barari, Emirates Hills, Jumeirah and The Villa, just to name a few.

Expected Performance of Dubai's Real Estate Market in 2023

According to Hussain Sajwani, CEO of DAMAC Properties, Dubai’s real estate market has just started entering its best phase. Whilst before the emirate was considered as a location for temporary stay, nowadays many individuals, including top billionaires from Europe, along with their families are choosing Dubai as a primary home. The success of the real estate sector is attributed to the efficient management of the COVID-19 crisis, with a shorter lockdown period than in Europe Saleh Tabakh, CEO of the Dubai-based Al Andalusia Courtyard, said that current indicators demonstrate positive tendencies for the property sector in 2023. Aspects that play an important role in attracting new investors include safety, security and the stability of the UAE, as well as the ease of setting up and operating business and 100% commercial project ownership. According to the Reuters data published in September 2022, home prices in Dubai are expected to rise by 3% on average. The short-term rental sector is highly likely to increase even more, thanks to new UAE visa policies implemented last year, including a 5-year multiple entry visa and an entry permit to visit relatives/friends, just to name a few. As a result, there is now a perfect opportunity to rent out your property as a holiday home, since many travelers prefer to stay in a comfortable private residence instead of a hotel room. It is worth noting that Dubai ranked as the world’s most popular tourist destinations for 2 consecutive years (2022 and 2023) in Tripadvisor’s Travellers’ Choice Awards, as the tourism here has returned to pre-pandemic levels. That being said, the emirate recorded nearly 23.7 million arrivals in 2022, according to the Dubai Media Office, which is an 89% increase from 2021. NBD! In Dubai, you can take advantage of a scheme which allows you to easily let your property out as a holiday home. To do so, one has to register with the Department of Tourism and Commerce Marketing (DTCM) and subsequently rent a property out either on their own or with the help of a real estate agency. The luxury property market will also keep thriving, thanks to a rising demand from wealthy individuals, as mentioned earlier. In fact, according to the data provided by DXBinteract.com, in the first 15 days of 2023, a total of 45 properties valued at AED 15M (USD 4M) or more were sold in Dubai. Some of the largest transactions of the current year were recorded in One Canal, Jumeirah Gate, Emirates Living, Bvlgari Lighthouse Dubai and The Residence | Burj Khalifa. In January 2023, Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, unveiled the Dubai Economic Agenda — D33, which aims to double the size of the emirate’s economy over the next 10 years. In line with this initiative, Dubai is set to enter the top 3 cities in the world for business and tourism, with astonishing economic targets of AED 31.9T (USD 8.7T). The government will also launch an array of innovative initiatives to bolster Dubai as the world’s top city to live and work in, which will have a positive influence on the local real estate sector, as well over the coming years. To keep up with the ongoing demand, many developers have decided to increase investments in new quality projects. For instance, Al Habtoor Group will develop 3 mega-properties worth AED 9.5B (USD 2.6B) in Dubai in 2023. The first project will be located in Al Habtoor City, which will consist of residential towers; one of which will be the world’s largest, regarding size and number of apartments. The other 2 include a unique complex in Al Habtoor Grand Resort in JBR and the re-development of the existing Habtoor Tower in Dubai Marina. Another premium real estate giant; Samana Developers, is set to launch 12 new projects with about 2,400 units this year. The total value of its new developments amounts to AED 2.5B (USD 680M) and include 5-star hotels, as well as residential complexes.

How Can We Help?

Metropolitan Premium Properties will gladly guide you through real estate acquisition in Dubai, whether for private use or as an investment. When hiring our agents, you minimize any risks to your investment, as our team are well-informed of the ongoing trends and the latest legislative changes in the local real estate sector. We will provide you with full support, from finding the most suitable property, to handling the paperwork and the registration of ownership in the DLD. Thanks to our cooperation with leading financial institutions, our specialists will also help you obtain a mortgage under lucrative terms, as expats can get up to 75% LTV for their first purchase. Another highlight of our services is property management, which can help you take advantage of a passive income without having to take on all the responsibilities of becoming a landlord.