Dubai home prices rise for 11th consecutive quarter!

And, according to analysts, will continue to grow at least one more, 5 years.

Dubai's real estate market, which continued to grow for the 11th consecutive quarter in the third quarter of 2023, is likely to continue to see "significant price growth" over the next five years as the prices will still be "very affordable." compared to other major cities of the world. In addition, the price growth will also be affected by the shortage of new housing offers in the coming years, analysts say.

Real estate prices in Dubai are much lower, than in Hong Kong, New York, Singapore, London, Paris, Tokyo, Sydney and many other leading cities in Europe and America. According to the international real estate consulting company Knight Frank, for US$ 1 million you can buy 17 sq. m. of luxury real estate in Monaco, 33 sq. m. in New York, 34 sq. m. in Singapore and London, 44 sq. m. in Sydney and Shanghai, 60 sq. m. in Tokyo, 70 sq. m. in Berlin and 105 sq. m. in Dubai. This proves that prices for luxury real estate in Dubai are lower by more than 50% compared to major cities around the world. This is what they believe will attract a large number of high net worth individuals, investors and end users to the market in the future.

"Currently, real estate in Dubai remains very cheap compared to other cities around the world and I believe the top end of the market will see significant price growth over the next five years and beyond," said Nick Candy, general manager of real estate at a Dubai brokerage.

According to Knight Frank, there are 77,864 homes (excluding branded residences) under construction in Dubai scheduled for delivery by the end of 2028, with an average of 13,000 homes per year over the next six years, well below historical levels.

"There is still a shortage of supply in the city, especially given population growth projections and a shortage of new homes in upscale neighborhoods as well as at the upper end of the price spectrum," said Faisal Durrani of Knight Frank.

He added that as the market approaches its fourth year of sustained price growth in this third market cycle, Dubai's luxury markets remain highly sought after.

Between the first and third quarter of 2023, around 87,000 homes worth more than US$ 10 million were resold, bringing the total value of sales to Dh224.6 billion (US$ 61.6 billion). In comparison, there were 92,000 transactions totaling Dh222.7 billion (US$ 60.64 billion) in 2022, Knight Frank said. However, monthly activity fell to 7,500 transactions in September, compared to a steady pace of more than 10,000 homes sold per month between January and August.

11th consecutive quarterly increase

Knight Frank reported that residential property values in Dubai continued to rise in the third quarter of 2023, that is - for the 11th consecutive quarter.

In the third quarter of 2023, the average Residential real estate prices increased by 5%, resulting in a cumulative increase of 30% since the first quarter of 2020, although prices remain 7% below their 2014 peak. On a year-on-year basis, prices showed a significant increase of 19%.

"The recent price increases underscore the unwavering confidence in Dubai's luxury real estate market. The city's remarkable development trajectory, world-class lifestyle and strategic position as a global center have reinforced Dubai's status as a magnet for the world's elite," said Candy.

Apartment prices in Dubai rose 5.1% to over US$ 3,823 per square meter, marking a significant increase of 26% since the first quarter of 2020, although despite a significant 19% increase last year, apartment prices still remain 10% below their 2014 peak.

In the villa segment, prices in Dubai increased by 4.5% between June and September, resulting in an average price of US$ 4646 per square meter. This reflects an 18% year-on-year increase and a 57% increase from the first quarter of 2020.