Dubai, Abu Dhabi record major H1 surge in off-plan deals

Dubai’s real estate market on a trajectory to achieve about Dh300 billion in sales this year

by

Issac John

  • Follow us on
  • google-news
  • whatsapp
  • telegram

 

The delivery of 7,300 units in Dubai during the quarter raised the total residential stock to 700,000 units. — File photo
The delivery of 7,300 units in Dubai during the quarter raised the total residential stock to 700,000 units. — File photo

Published: Tue 25 Jul 2023, 4:27 PM

Dubai and Abu Dhabi witnessed a sustained surge in off-plan transactions in the first half of 2023, signalling resurgent investor confidence and robust absorption of newly launched projects, data showed on Tuesday.

In the second quarter of 2023, off-plan residential sales increased by 38 per cent year-on-year in value and 30 per cent in volume in Dubai, while the value of off-plan transactions in Abu Dhabi more than doubled from Dh 1.8 billion to Dh 3.8 billion, according to JLL’s Q2 Market overview report.


In Dubai, most (57 per cent) of the transactions in the category were recorded between Dh500,000 and Dh2.0 million, with investors primarily focusing on studios and 1BR units in areas like JVC, Dubailand, and MBR City. In Abu Dhabi, most of the activity is concentrated between Dh2.0 and Dh3.0 million, driven by villa transactions on Al Reem Island and Yas Island, said the report.

In the residential segment, the delivery of 7,300 units in Dubai during the quarter raised the total residential stock to 700,000 units, with an additional 21,000 units slated to be handed over in the remaining half of this year. In Abu Dhabi, the addition of 1,000 units brought the total residential stock to 283,000 units. In terms of future supply, close to 3,000 units are in the pipeline for 2023, mainly comprising apartments within master-planned communities such as Al Raha Beach, Al Maryah Island, and Al Reem Island, the JLL report said.


The real estate sector in Dubai recorded the highest semi-annual sales ever in the first six months of 2023 with a total of 60,440 sales transactions worth Dh177.3 billion, according to the Dubai Land Department. With the recorded value of registered real estate mortgages reaching Dh61.7 billion in the first half of 2023, including grants worth Dh13.6 billion, the total real estate transactions in Dubai in the first 6 months of this year amounted to Dh 252.7 billion. Ready properties accounted for the majority share of real estate sales in Dubai in the first half of this year, recording 30,116 sales transactions with a value of Dh107.5 billion, compared to 25,371 sales transactions with a value of Dh79.6 billion in the first half of last year, achieving a 35 per cent growth in sales value.

A surge in property investment from high networth individuals between 2012 to 2022 has placed Dubai’s real estate market on a trajectory to achieve about Dh300 billion in sales this year, according to a new report from Unique Properties.

Faraz Ahmed, associate, Research at JLL Mena
Faraz Ahmed, associate, Research at JLL Mena

Faraz Ahmed, associate, Research at JLL Mena, said all sectors demonstrated strength and adaptability in Q2 propelled by new and emerging trends. The continued growth in off-plan transactions, rising demand for quality office spaces, evolving retail offerings, and transformative renovations in the hotel sector, collectively indicate the dynamism of Dubai and Abu Dhabi as vibrant investment destinations, he said.

“With strong investor confidence, robust absorption of new projects, and innovative developments, there is no doubt that these cities are paving the way for sustained growth and transformation across the entire real estate landscape in the UAE,” said Ahmed.

While residential market performance continued to improve in Dubai, with a 16 per cent uptick in sale prices and 24 per cent in rentals in May 2023 when compared to the same period last year, in Abu Dhabi, sale prices and rentals were marginally up by 1.0 per cent each as outdated stock on the main island continued to face pressure from newer high-end communities. This trend is likely to continue as Abu Dhabi draws demand toward upcoming new islands. mixed-use communities.

According to Bayut's real estate market report for H1 2023, off-plan apartments in Abu Dhabi, Plaza by Reportage in Masdar City have been the preferred choice in the affordable segment, whereas Yas Bay in Yas Island has continued to attract High-Net-Worth investors. Sales prices for affordable apartments have generally decreased by up to 5.0 per cent, whereas villas have become more expensive by up to 3.42 per cent.


More news from Business