UAE Real Estate Market in Q3: Dubai Achieves Best Quarter, Abu Dhabi Sees Sustained Demand

With remarkable growth across both the Emirates, real estate demonstrated substantial growth and impressive spikes in demand for both off-plan and existing properties

Revealing a sustained interest from property seekers and record transaction values for the third quarter across Dubai and Abu Dhabi, MENA’s leading property portal, Property Finder announced results from its latest Market Watch report for Q3 2023. The demand for property was found to be a preferred investment with great potential for long term value as a result of emerging trends that are reshaping the narrative for real estate in the UAE.

Record highs mark a successful quarter

According to Mo-asher Dubai’s official Sales Price and Rental Performance index launched by Dubai Land Department (DLD) in cooperation with Property Finder for Dubai, the overall quarterly Index for sales in Q3 2023 recorded 1.554 and an Index price of AED 1,429,187. The apartments quarterly sales Index recorded 1.676 and an Index price of AED 1,390,272, and the villas/townhouses quarterly sales Index recorded 1.443 and an Index price of AED 2,473,730. The Index showed growth in all categories. Year on Year (YoY), from Q3 2022 to Q3 2023, the overall Index surged from 1.383 to 1.554, indicating a 12.4% increase.

For rentals, Q3 2023 recorded 1.08 and an Index price of AED 58,036, the apartments quarterly rental Index recorded 1.104 and an Index price of AED 53,005, and the villas/townhouses quarterly rental Index recorded 0.969 and an Index price of AED 150,181. The overall rental Index stood at 1.08, indicating an improved rental environment compared to previous quarters.

Property Finder’s proprietary data further found that Dubai recorded 31,181 transactions compared to 25,400 in Q3 2022, marking a 22.76% YoY increase in the performance of ready and off-plan transactions, leading to Dubai’s highest quarterly peak in a decade.

On the other hand, according to data from the Department of Municipalities and Transport (DMT), Abu Dhabi experienced a significant surge in total sales transactions (both residential and commercial) during Q3 2023. The number of residential transactions reached a record high for a quarter, with 3,718 transactions compared to 1,569 transactions in Q3 2022, reflecting a substantial increase of 137% to represent around 92% of the total transaction and 90% of the overall value.

Off-plan properties continue to drive scope for long term growth

Both cities experienced a significant increase in the contribution of off-plan transactions in Q3 2023. Dubai’s off-plan properties made for 47.2% of the total transactions compared to 46.5% in Q3 2022, with 14,714 transactions in Q3 2023 compared to 11,809 in Q3 2022 recording around a 24.6% increase and the highest sales transaction volume for Q3 in a decade. Sales value for off-plan properties touched AED 35.71 billion transactions in Q3 2023, compared to AED 24.34 billion in Q3 2022, leading to a 46.72% increase and contributing to 36.6% of the total transaction value witnessing the highest value recorded ever for Q3.

Showing similar trends, Abu Dhabi recorded 2,954 off-plan sales transactions compared to 1,041 transactions in Q3 2022 to represent 79% of the total transactions as opposed to 66% of the total transactions in Q3 2022, showing a significant YoY surge by 184% in terms of volume and 367% increase for the same period in terms of value. The off-plan sales transaction value in Q3 2023 contributed to 87% of the total sales transactions value compared to 64% in Q3 2022 by reaching AED 12,713 billion compared to AED 2.72 billion. While the off-plan market witnessed an 184% increase compared to Q2 2023. With a strong economic framework and increased foreign confidence, Abu Dhabi’s real estate sector has been thriving with support from both the public and private sector.

Existing properties contribute to a continued positive trajectory for the sector

A spike in off-plan may have resulted in new trends within the existing property market but it continues to complement overall growth with higher values throughout. It is noteworthy that tenants changed their behavior, preferring to own a home instead of renting, driven by the surge in average market value for renting. In Dubai, existing/ready transactions in Q3 2023 presented 52.8% of the total sales transactions compared to 53.5% in Q3 2022.

Making up for 52.8% of the total transactions, existing sales witnessed a new record with 16,467 transactions compared to 13,591 in Q3 2022, to be the highest performance for a quarter ever recorded, with a YoY increase of 21.2% and 7.24% spike when compared to Q2 2023. Also hitting a record high in values touching AED 61.8 billion in comparison to AED 45.03 billion in Q3 2022, marking a remarkable increase of 37.3% to record the highest transaction value ever recorded for a quarter, and an 11.2% increase from Q2 2023.

For Abu Dhabi, existing/ready market sales registered 764 ready properties compared to 528 in Q3 2022, to represent around 21% of the total transactions compared to 34% in Q3 2022; marking a notable growth of 45% compared to Q3 2022. The existing/ready transaction value in Q3 2023 contributed to 13% of the total sales transactions value compared to 36% in Q3 2022, by reaching AED 1,873 billion, while transaction values witnessed a notable increase of 25% compared to AED 1,502 billion in Q3 2022.

More property seekers in the UAE

Dubai saw significant increases in rental contracts with a YoY increase of 11.2% by registering 156,422 contracts compared to 140,685 contracts in Q3 2022. New contracts reflected an increase of 2.63% by registering 84,766 contracts compared to 82,596 contracts in Q3 2022. Renewed contracts supported the rental market by registering 71,659 contracts to witness an increase of 23.36% compared to 58,089 contracts in Q3 2022, with a notable increase by 17% compared to 61,219 registered contracts in Q2 2023. All in all, more people were found to be looking for a home in the city, driving prospects for sustained momentum in the months to come.

Top areas to look out for

According to Property Finder’s proprietary data, Dubai Marina, Downtown Dubai, Business Bay, Palm Jumeirah, and Jumeirah Village Circle emerged as top choices for those looking to own an apartment, while Dubai Hills Estate, Palm Jumeirah, Arabian Ranches, Al Furjan, and Damac Hills were considered best places for villas.

Dubai Marina, Jumeirah Village Circle (JVC), Business Bay, Downtown Dubai, and Jumeirah Lake Towers (JLT) were preferred for apartment rentals in Q3 2023. Dubai Hills Estate, Damac Hills 2, Al Barsha, Jumeirah, and Damac Hills were the top areas among renters searching for villas.

In Abu Dhabi, Al Reem Island, Yas Island, Al Raha Beach, Saadiyat Island and Masdar City remained a focus for those who want to own an apartment for investment or residence purposes in Q3 2023. Al Raha Beach, Khalifa City, Corniche road, Al Khalidiya, Mohamed Bin Zayed City, Yas Island, Al Reef, and Saadiyat Island were preferred choices for apartment and villa rentals. Despite the global economic changes, the luxury real estate market in Saadiyat Island demonstrated impressive durability. Upscale properties persistently maintained their value, exhibiting a consistent rate of growth during the initial half of 2023.

Speaking on the outstanding progress made in Q3 2023, Cherif Sleiman, Chief Revenue Officer, Property Finder said, “We closed Q3 with an increased uptake in off-plan properties, strong investor confidence and a rising demand for ownership. Q3 2023 has only taken that success a notch higher, revealing even more opportunities to grow in the months to come. In the coming months, we remain committed to monitoring all aspects of the market trends to enable better decisions for property seekers through data backed transparency and enhanced trust across our platform.”