Top 5 Dubai real estate trends to watch out for in 2023
Heading into the new year, it is topical to look at real estate trends that are likely to play out soon. Despite challenges, such as supply chain disruptions, rising inflation and tense geopolitics, Dubai’s real estate market continues to push forward. Demand for real estate assets continues to rise, and developers are working around the clock to keep up.
1. Ultra-luxury units are in demand
The growing demand for ultra-luxury homes is not a new trend in Dubai but one that is likely to continue through 2023. Some experts attribute that to the influx of millionaires into Dubai following the pandemic. Increasing competition from developers is likely a factor as well. While the exact cause driving the trend is unclear, what is clear is that the growing demand has outpaced the market. So, a shortage of luxurious properties on the market could plague buyers and developers in the new year.
2. Foreign investors are on the rise
Dubai has long had a reputation for being a friendly market for investors from across the globe. Despite a brief downturn following the outbreak of COVID-19, the market has largely recovered, and foreign investors are once again flocking to Dubai. With an influx of new developments coming to market soon, there is room for everyone. But this trend does mean that investors can expect more competition and higher prices.
3. Villas continue to be popular
Rising rental prices have adversely impacted apartments. In 2023, expect to see the villas shine. Single-family villas have dominated the market in recent years and are likely to continue to do so in the new year. One reason for this is the rising rents, which have pushed many to purchase a home. A desire for more space, as well as the impact of an economic recovery, are also drivers.
4. Housing costs continue to soar
Demand for villas isn’t the only thing on the rise; their prices are, too. Between 2021 and 2022, prices for villas surged by 40%, while rental costs rose by 25%. While the cost of villas could continue to rise, there are signs that rents could slow in 2023. A new Dubai Rental Index has been proposed and may be approved within months. As a result, rents will now be determined based on a building’s materials and amenities rather than the adjoining location. This will slow the drastic rent hikes and provide more transparency for both tenants and property owners.
5. A new generation of buyers is emerging
Dubai has long attracted the young generation. Now, that generation, equipped with good disposable income and driven by a desire to finally start the home ownership journey, is increasingly entering the real estate market. As a result, we can expect an uptick in millennials purchasing homes in the new year and beyond. This generation will not only increase demand for properties but also emphasize sustainable materials and smart home technologies.
