Dubai Real Estate Market Forecasts for 2023

Dubai Real Estate Market Forecast is necessary for all those who are interested in Dubai real estate and want to invest in it.
For this reason, on the Dubai Home website, we have dedicated this article to Dubai Real Estate Market Forecast, so that all those who want to invest in Dubai real estate can get complete information.

It has been shown that Dubai’s real estate prices and rental prices have grown significantly in 2022, which has been a sign of a positive trend. As a result of the high demand for real estate among investors from around the world last year, the emirate experienced record-high rental rates and transactions in residential properties. 

Dubai is one of the most popular locations in the world to acquire property since it offers exceptional safety, a business-friendly environment, a wide range of investment opportunities, and more.

Dubai is one of the most well-known and developing cities in the Middle East, which always attracts the attention of international investors. The development of Dubai in recent years has caused many people to seek immigration and investment in real estate in the United Arab Emirates.

The growth of the Dubai real estate market in 2023 is one of the challenges for investors in the world. Dubai is one of the most well-known and developing cities in the Middle East, which always attracts the attention of international investors.

The development of Dubai in recent years has caused many people to seek immigration and investment in real estate in the United Arab Emirates.

Why should you invest in Dubai?

It may be interesting for you to know that the growth of the Dubai real estate market in 2023 has been such that most of the big and well-known investors in the world spend their capital on building settlements in Dubai and believe that their capital will return multiple times.

Certainly, their thinking is completely correct, in the coming years even the demand for buying property in the market of Dubai and the United Arab Emirates will increase greatly.

What are the investment conditions in the Dubai real estate market in 2023?

We said above that the growth of demand for investment in the Dubai market has been amazing and currently, large investors are active in this field. Having said that, if you also intend to invest in Dubai, you must have the following conditions:

• Payment of at least one million AED
• Buying property ready for delivery
• Traveling to Dubai once every 6 months to maintain residence and investment visa
• The proportion of the area and size of the property with family members

Benefits of investing in the Dubai real estate market in 2023

As we mentioned above, investing in the Dubai real estate market can bring many benefits to the investor, because Dubai is a developing city with a strong economy. However, investing in the United Arab Emirates has the following benefits.

• Return on Investment

Considering that house prices in Dubai are not that low, it is natural for investors to worry about the return on their capital. Regarding the return on investment in Dubai, we must say that Dubai has a return on capital ROI and has adopted durable and very good policies. 

This issue eases the minds of investors to a great extent and they invest in this country with more confidence.

• Allow Absolute Ownership

According to the policies of the United Arab Emirates government, all non-Emirati people and residents of the Gulf Cooperation Council can also buy property in this country. 

According to the UAE’s international policies, foreigners can invest in real estate in the UAE with full security and not worry about the return of their capital.

• The United Arab Emirates is flexible in the challenges of the international economy

Apart from the fact that the city of Dubai has a wide range of laws in the field of real estate, it is considered one of the cities with high flexibility in the world concerning the challenges of the international economy, and its stability in the commercial, economic, communication and infrastructure fields has surprised everyone.

In fact, we must say that in terms of legislative and political policies, the United Arab Emirates is considered one of the first-class countries in the world. Therefore, no matter how high the price of an apartment in Dubai is, it will still be worth it.

• Obtaining an investment visa

Investing in the real estate market of the United Arab Emirates is one of the things that make it possible to get a visa and stay in the United Arab Emirates. The predictions made about the growth of the Dubai real estate market in 2023 indicate that this city can be considered one of the world’s economic poles in the not-so-distant years.

In addition to being a safe and very profitable investment, buying a property in Dubai also makes it possible to obtain residency in this country. For this purpose, if you can buy a property worth 5 million AED in Dubai, you will be granted a 5-year visa, but if you can buy a property worth 10 million dirhams, you will be issued a 10-year visa. Of course, it will not be possible to sell that property for three years.

• Zero percent tax

One of the advantages of buying a property in Dubai is that there is no need to pay taxes. Unlike all countries in the world, in the United Arab Emirates, there is no need to pay taxes if you own a property. This issue shows the prosperity and growth of the Dubai real estate market in 2023.

• High variety of properties

When it comes to buying property in Dubai, the investor’s hands are wide open for choice, there are different options with different budgets.

Where are the best areas in Dubai to invest in real estate?

As we mentioned above, Dubai is one of the top cities for investment in the world. With a negative inflation rate of two percent and zero tax, this city has provided good conditions for investors to multiply their capital well in a short period.

Of course, to return the investment, the property must be purchased in the right places. Among the places suggested for investment in Dubai, the following neighborhoods can be mentioned:

• The downtown
• Jumeirah Beach Residence
• Business Bay
• Palm Jumeirah
• Al-Furjan
• Marina
• Damak Hills
• Dubai South
• Jumeirah Village Circle

How Will The Dubai Real Estate Market Forecast Be?

As a result of unpredictable conditions and a shift in customer behavior, 2022 was an incredible year for Dubai’s real estate sector. In fact, according to the Dubai Media Office, the value of all deals crossed the half-a-trillion AED mark for the first time ever.

There have been a lot of new initiatives implemented by the Dubai Land Department (DLD) to protect investor rights, as well as the Golden Visa amendments, which contributed to such a huge increase in demand. In 2023, judging by the current performance, Dubai’s real estate market will continue to trend.

The purpose of this article is to outline the results of the previous year (2022) and the projections given by experts regarding the property sector in 2023 based on the results of the previous years.

A look at Dubai’s real estate sector in 2022

A few of the key events from 2022 that boosted the performance of the local real estate sector and attracted new investors are listed below:

1. During the UAE visa overhaul on October 3rd, the minimum qualifying amount for a 10-year Golden Visa dropped from AED 10M (USD 2.7M) to AED 2M (USD 545K). Having a Golden Visa lets you sponsor your family, as well as your domestic staff, assuming they’re licensed.
2. Dubai Land Department (DLD) and Dubai Municipality (DM) recently announced that they have joined forces to boost the competitiveness of Dubai’s property sector and increase operational efficiency by 20 %.
3. It appears that some prominent Dubai developers have started accepting cryptocurrency as a payment method for property acquisitions, including DAMAC Properties and Nakheel
4. There was a Memorandum of Understanding (MoU) signed by the DLD with Property Finder, Bayut, and DXBinteract.com, which enabled the three companies to provide comprehensive information regarding the Dubai property market. In this way, buyers will be able to get a better understanding of the property prices by area, the stages of construction, rental yields, and much more, all at their fingertips.
5. By selling 100,000 sq. ft of seafront plots in Dubai Marina to an undisclosed developer, Metropolitan Premium Properties and Mallorca Properties closed the biggest residential land deal of 2022.
6. According to Khaleej Times, Dubai’s General Directorate of Residency and Foreigners Affairs has issued 79,617 Golden Visas in 2022, up 32,467 from last year, which is a massive 69% increase.
7. Dubai’s Land Department launched a strategic plan for 2026 that will be implemented in 3 stages; we want it to be the world’s leader in property investments and contribute more to Dubai’s GDP.

As a result of the implementation of the initiatives they 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 528 billion (USD 143.7 billion), as revealed by the Dubai Media Office.

In total, there were 122,658 transactions in the market in 2022, which was an increase of 44.7% compared to 2021. The sales were driven by an increase in demand from Russian, Ukrainian, Asian, European, and American investors.

The Dubai Media Office reports that 55 projects worth AED 3.2 billion (USD 871.2 million) were completed in 2022, an increase of 57% in numbers and 8% in value from last year.

Dubai is one of the leading property destinations in the world with more than 350 projects under construction at the moment. Developers offered 50,000 new residential units, the most since 2008.

As for the ongoing projects, there are the Dubai Islands, World Islands, and Lanai Island, for just a few names off the top of our heads. As per a report by DXBinteract.com, 34,000 units have reached a 70% completion stage and are scheduled for completion by 2023.

The 2022 real estate market

Sales of off-plan properties grew by over 100%, with over 52,000 properties worth over AED 124B (USD 33.7B). Flexible payment plans and lucrative yields from off-plan sales are credited with such staggering statistics.

Recently, privacy and space have become important factors to many individuals when purchasing a house, which is why many have chosen to sell and move to larger homes to ensure they have enough space to live comfortably.

Furthermore, a high number of tenants in the emirate have recently turned into buyers due to lower interest rates, despite renting out their apartments at higher prices than before.

The ready property sales grew by 30% to 45,200 properties for AED 140 billion (USD 38 billion). Due to inflation on construction materials and a higher level of features and amenities, ready homes in Dubai cost 14-30% less than recent launches.

The value and volume of luxury properties have risen 97% and 85%, respectively since wealthy people moved in and upscale units are undersupplied.

Currently, in Dubai, there are only about 300 villas and 80 apartments, both off-plan and ready, which exceed the price of AED 40M (USD 10.9M) at present; most of them are located in MBR City and Emirates Hills, and Palm Jumeirah.

The DLD also reported that the number of female investors in the local real estate market increased by up to 50.8% from 2021 to 2022, resulting in 33,419 property investments made by female investors worth over AED 58.8B (USD 16B) in 2022.

Increasing numbers of female investors illustrate the vision of the UAE leaders that they want to encourage women to be more involved in different aspects of their life as well as economic activities.

In terms of apartment sales, Business Bay, Dubai Marina, Jumeirah Village Circle, Al Merkadh, and Downtown Dubai were the most popular areas. Meanwhile, villa sales were most popular in the following areas: DAMAC Lagoons, Al Furjan, Dubai South, DAMAC Hills 2, and Villanova.

The recent DXBinteract.com report highlights the fact that Jumeirah Bay and Bluewaters Island registered 100% and 50% growth in the price per square foot during the last year, respectively, which reflects the great potential these 2 neighborhoods have for investment.

In addition to the fantastic amenities on offer, there will also be an infinity pool with a resort-style atmosphere, an observation deck, and a tennis court for guests to enjoy.

Rental Property Market in 2022

A Bayut and Dubzzle study showed that budget-friendly apartments soared by up to 24%, whereas luxury apartments rose 24–54%. A whopping 54% increase was seen in rental rates for prime villas, while affordable villas saw a 2-23% increase.

Jumeirah Village Circle and Bur Dubai were among the most popular locations for apartment accommodation among visitors on a budget, whereas DAMAC Hills 2 and Mirdif were popular locations for villa accommodation on a budget.

For those seeking to rent high-end villas in the upscale segment, Dubai Marina and Business Bay are still the top destinations for those seeking luxury properties, while Al Barsha and Jumeirah are popular with those looking 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.

According to the study, Jumeirah Village Circle presented the highest rental returns for budget-friendly villas/townhouses at 6.9%, while DAMAC Hills showed the highest ROI for upscale villas at 6.95%.

The upscale market will see a rise in rental values as a result of an increased number of high-net-worth individuals since the supply of housing isn’t enough to satisfy the demand. It is predicted that most of the upcoming handovers will occur in affordable areas, and that very few villa and townhouse communities will be completed in this year’s calendar.

There is no doubt that the rental rates for well-located properties, especially larger properties, will continue to rise this year (2023). Specifically, beachfront properties, residences with a view of the skyline as well as communities with gated entrances will be in great demand.

Flow of Investors

There were 80,216 investors in the UAE last year who registered 115,183 new property investments for AED 264.15B (USD 72B). In 2022, there were 53% more investors, followed by the British with 12% and the Indians with 11%. Russians accounted for 15% of all purchases, followed by the British with 12%.

In 2022, the emirate experienced the largest inflow of private wealth due to a massive geopolitical crisis. More than 16% of Russian entrepreneurs and companies moved to the UAE including Dubai.

Aside from the local real estate market benefiting from the successful hosting of the 2022 World Cup, there has also been a considerable impact on Dubai’s commercial market as the emirate’s status as a ‘financial hub’ and the main tourist attraction in the region, as a result of which Dubai became the emirate’s main beneficiary elsewhere Qatar.

Forecasts for the real estate market in 2023

Dubai is one of the most sought-after investment destinations in the world and this is mainly attributed to some factors, the most important of which are Dubai’s secure financial foundation, the economy as well as its bright development prospects shortly.

Dubai’s property market is expected to grow at an average rate of 5% this year, according to CBRE. Recent research projects a 46% growth in Dubai’s property market by 2023.

 There are expected to be more than 35,000 new housing units delivered, over 30,000 of which will be in Dubai. Strategic Plan 2026, which will help to establish Dubai as one of the world’s leading property markets, was announced earlier in 2023, and it is expected to contribute to this achievement23. 

It is expected that the emirate will explore new real estate solutions, promote innovation, and create a data-driven sector of the property market as a way to build investor confidence. In addition, a strong focus will be put on bringing global standards to the property market.

Note: Because of the encouragement for small and medium-sized businesses and the flexibility of the business environment, the emirate is an attractive investment environment. Dubai’s high demand for housing among entrepreneurs and business specialists makes purchasing a property a good investment.

Dubai will continue to attract foreign investors. When it comes to the energy crisis and geopolitical instability, Dubai will only strengthen its position. So the demand for property will continue to rise in 2023.

According to experts, Dubai’s real estate market will see an upward trend in 2023, as local prices are expected to rise by 10–15%. Because of their low prices, undervalued districts will see massive growth. 

It is estimated that the real estate prices within the vibrant district of Jumeirah Village Triangle are expected to increase by 29% during the 2015-2018 period, which is prompting the expectation that by 2022, prices will increase by 62% and the average property costs will rise to AED 731,000 (USD 199,000).

What to expect from Dubai’s real estate market in 2023

Dubai’s real estate market is just starting to get really hot, says DAMAC Properties CEO Hussain Sajwani. People who want to live here aren’t just visiting, they’re going to live here. Unlike before, when Dubai was regarded as a temporary place to stay, people are choosing to live here as a permanent place. 

As Saleh Tabakh, the CEO of Al Andalusia Courtyard in Dubai, explained, current indicators indicate a positive outlook for the property sector in the year 2023. Many factors contribute to the attraction of new investors to the UAE, such as the safety, security, and stability of the country, as well as the ease of establishing and operating a business as well as the 100% ownership of the project.

A report by Reuters published in September 2022 predicts that Dubai’s home prices are expected to increase by an average of 3% over the next few years.

A 5-year multiple entry visa for the UAE and entry permits for visiting relatives/friends, just to name a few changes made last year, are likely to drive the short-term rental market even further. Consequently, you can now rent out your property as a holiday house since a lot of travelers prefer staying in a home instead of a hotel.

In fact, Dubai has been consistently ranked as one of the world’s most popular tourist destinations for the past two years, according to Tripadvisor’s Travellers’ Choice Awards, since the tourism industry has been able to get back to its pre-pandemic levels.

According to the Dubai Media Office, in 2022, the Dubai emirate recorded nearly 23.7 million visitors, which was an 89% increase over 2021, which was a record year for the emirate.

In Dubai, you have the opportunity to take advantage of a scheme that lets you easily lease your property out as a holiday home through a company known as NBD. To do that, one must register with the Department of Tourism and Commerce Marketing (DTCM), and then rent out a property either on their own or through the assistance of a real estate agency.

According to the same study, the luxury property market will continue to flourish as long as the demand for luxury properties from wealthy individuals continues to grow. Taking into consideration the data provided by DXBinteract.com, 45 properties valued at AED 15M (USD 4M) and more have been sold in Dubai over the past 15 days.

There have been some very large transactions this year, including those in One Canal, Jumeirah Gate, Emirates Living, the Bvlgari Lighthouse Dubai, and The Residence Burj Khalifa.

It was announced in January 2023 that Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, will unveil the Dubai Economic Agenda – D33, which aims to double Dubai’s economy within the next decade.

The Dubai initiative is aiming to put it in the top 3 cities in the world for business and tourism, achieving an astounding economic target of AED 31.9 trillion (USD 8.7 trillion) by 2021. Additionally, the Dubai government will also be launching an array of innovative initiatives to further bolster Dubai as one of the world’s best cities to live and work in, which will have a positive impact on the local real estate industry as well shortly.

Developers are investing more in new quality projects to meet the demand. Al Habtoor Group plans to develop three massive properties in Dubai worth AED 9.5 billion (USD 2.6 billion) by 2023.

One of the other premium real estate giants, Samana Developers, is planning to launch twelve new projects with approximately 2,400 units this year. The total value of their new developments amounts to AED 2.5B (USD 680M) and include 5-star hotels as well as residential complexes.