The UAE Real Estate Market – Q1 2023

The UAE’s real estate market is surely among the most prominent and promising ones in the area. Either renting, buying, or even investing, it’s not an easy and quick decision as it has to be well planned. 

To save your time and ensure you are on the right track, find below the market performance and trends with full insights across Abu Dhabi and Dubai. 

You will know in detail about the sales transactions’ value and volume, the mortgage market, and the top areas to buy, rent, or invest. Besides, it includes insights about the off-plan and existing/ready sales markets, to find yourself the best option. 

Dubai

Highlights 

• Dubai contributes to the total GDP of UAE with 25.8%
• The real estate market contributes to Dubai’s total GDP with 15.2%
• The emirate’s economy is showing good progress in recovering from the pandemic consequences. 

Total Sales Transactions Volume 

• 2023 started its first quarter with outstanding performance and a remarkable record ever recorded, with 30,952 total sales transactions compared to Q1 2022. 
• Q1 2023 also recorded a significant increase of 52% YoY to be the highest performance for a quarter ever, owing to the great performance of the off-plan transactions.

Off-Plan Transactions

• A new record of off-plan sales in Q1 2023 is reaching 15,948 transactions with an 88.4% increase compared to Q1 2022. 
• During the 1st quarter of 2023, the off-plan transactions’ share is of the total transactions, which is around a 10% difference compared to Q1 2022. This reflects the great support of the off-plans market to Dubai’s real estate market. 
• The off-plan/primary introduced new high-profile launches to the market in Q1 2023, like:
  • Lanai Islands in Tilal Al Ghaf
  • The Residence at Burj Khalifa
  • Jouri Hills in Jumeirah Golf Estates
  • Bluewaters Bay on Bluewaters Island 
  • New launches in District One and Madinat Jumeirah Living. 
• The diverse selection of projects that are newly launched offers you various options to enjoy a lavish living and a unique level of investment value.

Secondary Transactions

• The existing/ready sales witnessed a new record by reaching 15,004 transactions with a 26.24% increase compared to Q1 2022.

Total Sales Transactions Value 

The strong economic growth and tourism industry are the reasons behind the high demand for housing; as a result: 

• Q1 2023 recorded the highest value ever for a quarter with sales transactions amounting to AED 89.056 billion 
• The value of the sales transactions increased by 61.4% compared to Q1 2022, making a new benchmark for the total sales value. 

Off-Plan Transactions Value

• The off-plan sales value reached AED 35,74 billion transactions in Q1 2023, making a new record with a 124.6% increase compared to Q1 2022
• In addition, 40% of the total transactions value owes to the off-plan transactions, achieving an 11% increase compared to the same period last year. 

Secondary Transactions value

• In Q1 2023, the secondary transactions sales value set a new record of AED 53.3 billion, marking a remarkable increase of 35.78% compared to the same period of the previous year.
• This marks the highest transaction value ever recorded for a quarter. It achieved a 15.53% increase from Q4 2022.

Total Rental Contracts’ Relative Distribution by Area in Q1 2023

New Rental Contracts’ Relative Distribution by Area in Q1 2023

Dubai rental market witnessed a number of new rental contracts by the different residents seeking new homes; find below the top areas where new leasing contracts took place:

• Jabal Ali Industrial First
• Al Warsan First
• Muhaisanah Second
• Jabal Ali First
• Business Bay

Renewed Rental Contracts’ Relative Distribution by Area in Q1 2023

The satisfaction and demand of the residents about certain areas was confirmed according to the numbers of renewed contracts in Dubai. 

Here are the top communities that witnessed leasing contracts renewal:

• Jabal Ali First
• Naif
• Al Warsan First
• Al Karama
• Al Suq Al Kabeer

Mortgage Market Performance 

Highlights

• The mortgage market in Dubai Q1 2023 witnessed a growth of 19% compared to the same period last year, in spite of the unexpected rise in interest rates and unit prices. 
• The mortgage market showed a 60% growth in mortgage applications which reflects that the mortgage market will continue to in the 2nd quarter too
• There are different factors behind this great growth, including the rise in rental prices, which made it difficult for residents to find an affordable home; consequently, many residents turned to the mortgage as a more secure option. 

Areas with a Rise in Mortgage Transactions

Due to the rise in property prices and the costs of living, residents tended to move to remote areas. Find below the top remote areas that witnessed a rise in mortgage transactions in Q1 2023:

• Dubai Creek
• Jumeirah Village Circle
• Al Fujran.

Top 5 Nationalities of Borrowers 

According to the data and insights, some nationalities in Dubai showed a great interest in the mortgage option. Here are the top 5 nationalities:

• India
• United Kingdom
• United Arab Emirates
• Pakistan
• Egypt.