The Dubai real estate residential market recorded a total of 7,523 transactions in September 2023, according to analysis by CBRE.
It represents a decline of 8.3 per cent compared to a year earlier.
This slowdown in activity levels has been underpinned by a drop of 41.5 per cent in off-plan market sales, whereas secondary market sales increased by 30.5 per cent.
Dubai real estate slowdown?
In the year to date to September 2023, the total transaction volumes reached 87,154.
This is the highest figure registered over this period and despite the slowdown seen in the last month, it is expected that the 2023 total will surpass the 92,144 registered in 2022.
In the year to September 2023, average prices in Dubai increased by 19.6 per cent.
Over this period, average apartment prices increased by 19.7 per cent, reaching AED1,357 per square foot, and average villa prices increased by 18.9 per cent, reaching AED1,605 per square foot.
The average apartment sales rates across Dubai are still below the record levels witnessed in 2014 by 8.8 per cent, although several key residential areas have long outperformed their 2014 benchmark.
Average villa sales rates currently sit at 11.1 per cent above their 2014 levels.
Downtown Dubai registered the highest sales rate per square foot in the apartment segment of the market, reaching AED 2,453, while Palm Jumeirah registered the highest sales rate per square foot in the villa segment of the market, reaching AED4,995.
In the rental market, a moderation in the rate of growth continues to be seen, where in the 12 months to September 2023, average residential rents increased by 20.6 per cent, down from the 21.7 per cent growth registered a month earlier.
Over this period, average apartment and villa rents rose by 20.7 per cent and 20.1 per cent, respectively.
The average annual apartment and villa rents reached AED108,606 and AED322,750, respectively, in September 2023.
The highest annual apartment and villa rents were respectively found in Palm Jumeirah, with average asking rents at AED257,366, and in Al Barari, with average rents at AED1,098,788.
Taimur Khan, Head of Research – MENA at CBRE in Dubai, said: “Dubai’s residential market ended the third quarter of the year by notching up another record, where the total volume of transactions in the year to date reached 87,154.
“This marks the highest total ever recorded over this period and an increase of 35.4 per cent compared to the previous year.
“That being said, a slowdown in demand levels has been witnessed on a monthly basis following a decline in off-plan sales, particularly within a number of core residential areas that significantly underperformed their average for the year. This can be largely attributed to the limited supply coming into the market.
“In the rental market, despite demand remaining elevated, the rate of rental growth has contracted every month this year to date.
“Over this period, a number of listings in several residential communities registered a reduction in their rental rates, including Business Bay, Downtown Dubai, Dubai Marina, and Palm Jumeirah. In the year to date to September 2023, asking rents of 22.6 per cent of the overall residential listings within those four areas have actually decreased.”
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