BackDubai's residential real estate market has remained steadfast in 2023, demonstrating remarkable resilience despite global political and economic events. This is the first year in some time that the city has been unaffected by external factors - as COVID-19, Qatar World Cup, or Expo 2020 - yet the city's property market continues to thrive. Dubai's secondary market has seen significant growth, with transactions surging by 85.51% year on year, according to the latest market report released by LuxuryProperty.com.
There has been a notable increase in demand for apartments with comparatively sluggish growth in the villa sector, the report finds. The increase in apartment demand can largely be attributed to a changing buyer mindset as Dubai resumes a post-pandemic way of life. The fact that villa prices have grown at nearly double the pace of apartment prices is also a factor, as many potential villa buyers found themselves priced out of that segment of the market and apartments became a more cost-effective option.
The increasing supply of apartments in Dubai, with 25,355 apartments delivered compared to 8,410 villas and townhouses, presented a wider range of options for buyers and investors. Coupled with declining villa demand, this trend led to a shift in the market.
Apartments now offer competitive amenities and facilities, negating the allure of gated villa communities. Apartment neighbourhoods have matured, with diverse offerings within walking distance. Additionally, with the easing of COVID-19 restrictions and more people returning to work, the demand for larger living arrangements, such as villas, has dwindled.
Another key takeaway is the ratio between cash and mortgage transactions - while mortgage transactions have grown by 44% year-on-year, they represent roughly 42% of all transactions. The larger presence of cash buyers suggests a healthy market with a greater degree of stability that will be less susceptible to broader economic changes.
The full analysis from LuxuryProperty.com can be found HERE.
