Continued boom in property prices fueled by strong demand among local and overseas property seekers. Bayut, the UAE’s leading property portal, has released its Dubai Property Market Report for H1 2023, revealing the areas most searched for in the emirate’s real estate sector. Based on the consumer search trends observed on the portal, prices in Dubai’s property sector have continued to increase across popular districts, making the market favourable for landlords and sellers. This continued boom in property prices has been fueled by strong demand among local and overseas property seekers for luxury and affordable properties in Dubai.
Rental prices for affordable apartments in Dubai’s popular districts have increased by up to 17%
- Based on the data from Bayut, sales prices for villas and apartments in the most-searched-for neighbourhoods of Dubai have recorded upticks of 1% to 17%in H1 2023.
- Potential investors looking for affordable villas and apartments have shown keenness for areas such as Jumeirah Village Circle (JVC), Jumeirah Lake Towers, DAMAC Hills 2 and Al Furjan, whereas prospective high net-worth investors have focused on luxury properties in Dubai Marina, Downtown Dubai, Arabian Ranches and Dubai Hills Estate in H1 2023.
- Rental prices for affordable apartments in Dubai’s popular districts have increased by up to 17%, while the cost of renting luxury apartments has significantly appreciated by up to 32%. Reasonably-priced villas in popular neighborhoods have experienced upticks of up to 50% in rents, whereas the cost of renting luxury villa properties have increased by up to 70%.
- Tenants in search of affordable apartments have shown an inclination towards properties in Jumeirah Village Circle (JVC) and Bur Dubai, while those looking for villas have preferred houses in DAMAC Hills 2 and Mirdif. For luxury properties, Dubai Marina and Business Bay have remained the most popular choice for apartment rentals, whereas Dubai Hills Estate and Al Barsha have attracted the most tenant interest for expensive villas.
- Based on the data released by Dubai Land Department, the emirate recorded 60,927 residential property sales transactions worth AED 179.3B during H1 2023.
Properties for Sale
Jumeirah Village Circle still the top choice for investors seeking affordable apartments in Dubai
Dubai Marina has remained an investor favourite for luxury apartment sales in Dubai.
- The average sales price-per-square-foot for flats in Dubai Marina has appreciated by 5.61%, to average at AED 1,679 during H1 2023.
- Investors looking for upscale apartments have also shown keenness for properties in Downtown Dubai, Business Bay, Palm Jumeirah, and Jumeirah Beach Residence. The average sales price-per-square-foot in these districts has increased by up to 13%. Most of these price hikes can be attributed to the increase in demand for properties in these areas.
According to the consumer search trends observed on Bayut, Jumeirah Village Circle has continued to be the top choice for investors in search of affordable apartments in Dubai.
- Jumeirah Village Circle apartments have recorded an uptick of 4.96% in average sales price-per-square-foot, to stand at AED 974 in H1 2023.
- Investors interested in affordable apartments have also gravitated towards the properties in Jumeirah Lake Towers, Dubai Silicon Oasis, Dubai Sports City and International City. There has been a 1% to 7% increase in the average sales price-per-square-foot of apartments in these areas, with the highest increase reported in Jumeirah Lake Towers.
Arabian Ranches witnessed the highest uptick in villa prices
The data compiled by Bayut shows that the average sales price for expensive villas in Dubai has continued to increase in the most prominent neighbourhoods during H1 2023.
- Arabian Ranches has been the top choice for buyers in search of buy-to-let luxury villas in Dubai, during H1 2023. The sales price-per-square-foot for villas in Arabian Ranches has averaged at AED 1,316, following an uptick of 2.81%.
- Houses in Dubai Hills Estate have also appealed to high-net-worth buyers. The average price-per-square-foot for villas in Dubai Hills Estate has recorded an uptick of 11.9% in H1 2023, to stand at AED 1,833.
- Buyers and investors have also shown interest in the upscale villas available in DAMAC Hills, Palm Jumeirah and Jumeirah Park. Prices in these areas have recorded upticks of up to 17%. The most prominent movement in prices was observed in Palm Jumeirah, which could be consequent to the increased demand in the area.
Investors and buyers interested in reasonably-priced villas in Dubai have mostly favoured DAMAC Hills 2 in H1 2023.
- The sales price-per-square-foot for houses in DAMAC Hills 2 has recorded an uptick of 6.25%,to average at AED 684.
- Jumeirah Village Circle has also been a popular choice for investors looking for affordable buy-to-let villas in Dubai. The average price-per-square-foot for villas in Jumeirah Village Circle has appreciated by 6.43%, to stand at AED 714 in H1 2023.
- Prospective investors have also shown an inclination for the affordable villas in Al Furjan, The Springs and Reem. Prices in these districts have recorded upticks of 5% to 11% during H1 2023. The highest increase in prices has been reported for villas in The Springs, where landlords are listing their properties at higher price points to cater to the increasing demand.
The projected rental returns offer the investors yields up to 9%
Rental Yields in Dubai
- Offering projected rental returns of 9.04%, Dubai Sports City has been one of the best options for investing in affordable buy-to-let apartments, during H1 2023.
- Dubai Marina with a projected ROI of 7.25% has offered the highest rental returns for luxury apartments.
- For budget-friendly villas in Dubai, Jumeirah Village Circle has generated the most attractive return-on-investment of 7.98% in H1 2023.
- The luxury buy-to-let villas in DAMAC Hills have offered the healthiest projected rental yields of 7.28%.
Off-plan Projects in Dubai
- In the affordable segment, District 10 in JVC has remained the most popular option for off-plan apartments. Those looking for reasonably-priced off-plan villas have gravitated towards Villanova in Dubailand.
- Based on the data released by Bayut, Emaar Beachfront in Dubai Harbour has emerged as the most popular off-plan development for luxury apartments in Dubai, whereas Alaya in Tilal Al Ghaf has remained most preferred by those looking for luxury off-plan villas.
The rental costs for apartments in JVC have increased by 15% to 18% during H1 2023
Properties for Rent
For affordable rental flats in Dubai, potential tenants have continued to prefer Jumeirah Village Circle in H1 2023.
- The rental costs for apartments in JVC have increased by 15% to 18% during H1 2023. On average, studio flats have been rented out for AED 44k, whereas 1-bedroom and 2-bedroom flats have been priced at AED 63k and AED 88k, respectively.
- Potential tenants have also gravitated towards the reasonably-priced flats in Bur Dubai, Al Nahda, Deira and International City. Asking rents for apartments have generally appreciated by 6% to 16%. The most prominent uptick in asking rents has been observed in Al Nahda, which may be consequent to the increased demand for affordable properties in the area.
As per the search trends observed on Bayut, potential tenants looking at luxury apartments in Dubai have continued to favour the properties in Dubai Marina during H1 2023.
- The asking rents for flats in Dubai Marina have increased by up to 14%. In H1 2023, the rental costs for apartments in Dubai Marina averaged at AED 107k for 1-bed, AED 155k for 2-bed and AED 247k for 3-bed units.
- Other areas that attracted tenant interest for luxury apartment rentals include Business Bay, Downtown Dubai, Dubai Hills Estate and Palm Jumeirah. These areas have reported price hikes of up to 32% during H1 2023. The most significant increase was observed in Dubai Hills Estate, following the handover of Golf Suites and an influx of properties in Park Heights.
Dubai Hills Estate has emerged as the most popular option for luxury villa rentals in Dubai
In the affordable segment, DAMAC Hills 2 has emerged as the most preferred choice for prospective tenants in search of villas, during H1 2023.
- The rental costs for villas in DAMAC Hills 2 have increased by up to 42%, averaging at AED 77k for 3-bed, AED 101k for 4-bed and AED 121k for 5-bed houses, during H1 2023.
- Mirdif has also appealed to tenants in search of reasonably-priced houses in Dubai. During H1 2023, the district recorded price appreciations of up to 13% for 3-bed and 4-bed villas, which averaged at AED 112k and AED 127k, respectively. Valued at AED 141k, prices for 5-bed villas in Mirdif have remained unchanged.
- Tenants looking for affordable houses have also considered areas like Dubai South, Jumeirah Village Circle and Dubailand. The asking rents for villas in these neighbourhoods have generally increased by 2% to 50%. The 4-bed houses in Dubailand recorded the most significant increase in the average rental costs consequent to an influx of listings from Al Habtoor Polo Resort and Club – The Residences.
Based on Bayut’s real estate market report, upscale villa rentals across popular districts in Dubai have recorded upticks in annual costs during H1 2023.
- Dubai Hills Estate has emerged as the most popular option for luxury villa rentals in Dubai. The rental costs for 4 and 6-bed houses in Dubai Hills Estate have increased by 2% to 26%, averaging at AED 319k and AED 1.77M, respectively. The average rent for 5-bed houses stood at AED 394k, following a decrease of 1.53% in H1 2023.
- Al Barsha has also been a favoured option for high-income tenants. The rental costs for villas have appreciated by up to 23%. During H1 2023, the asking rents for 4-bed houses in Al Barsha averaged at AED 296k. The 5-bed houses have been rented out for AED 369k, whereas the 6-bed houses were priced at AED 457k.
- Prospective tenants have also shown a keenness for the expensive villas in Jumeirah, Arabian Ranches 3 and DAMAC Hills. These districts have reported price appreciations of up to 70%. The highest appreciation in rental costs was recorded for properties in DAMAC Hills, where the influx of inventory from Trump Estates and Veneto drove the prices upwards.
Commenting on the findings, Haider Ali Khan, the CEO of Bayut and the Head of EMPG MENA said: “Six months in, and we’re enjoying fabulous results. Prices are at a record high, traffic is steadily rising and transactions are also increasing month on month. A simple search of our new and improved Dubai Transactions tells you that the volume of sales transactions has gone up nearly 12% and value has increased by almost 20%. There is a lot of positive movement of wealth into the UAE as evidenced by the much talked about millionaire migration. Multiple reports have also confirmed that HNWIs from various parts of the world have earmarked a substantial budget towards property investments in the UAE. We proactively launched our Chinese version in anticipation of this changing market dynamic, and will follow it up with other innovations as well. We can also really see the supply vs demand dynamics playing out strongly in the rental market, with traditionally popular areas constantly being outpriced because of the supply crunch. The constant increase in rental prices has also prompted more people to take the plunge into homeownership, so the money they are allocating towards real estate ends up creating an asset in the long term. A strong focus on PropTech and transparency has also aided in creating a more positive outlook for the market overall, and we are excited to be a part of our city’s fantastic journey of growth.”