The landscape of Dubai’s real estate market witnessed a notable shift in 2023, with the percentage of end-user buyers rising from 38% to 44%, according to the latest report released by Betterhomes on Thursday.

Dubai recorded a staggering 120,742 residential sales transactions in the fiscal year 2023, marking a remarkable 38% increase compared to the previous record set in 2022 at 87,454 transactions. The surge was predominantly driven by a 49% increase in apartment sales, totaling 94,155 transactions.

Read this also : Alphabeta Properties Launches Exclusive Residential Project M77 in Dubai

While the market for villas and townhouses experienced a more modest growth of 9%, reaching 26,587 transactions, the pace was hampered by limited inventory in sought-after neighborhoods. Notably, off-plan sales took the lead with a 48% annual increase in 2023, constituting 54% of all transactions. Apartments, making up 87% of off-plan transactions, recorded a remarkable 63% annual growth, becoming the primary driver of this surge.

The secondary market observed a 21% increase in transactions, with ready-to-move-in villas and townhouses seeing a 3% uptick, while apartment sales soared by 32%. Due to supply shortages and high purchase prices, the demand for more accessible and reasonably priced apartments fueled growth in the villa market.

Read this also : Central Park Towers DIFC Unveils 116-Meter-Long Link Bridge, Transforming Connectivity

In total, Dubai’s property market amassed Dh322 billion in sales in 2023, reflecting a substantial 52% increase from the previous year. Notably, prices surged by approximately 18% in 2023, outpacing the 11% increase observed in 2022 and reaching a record high, exceeding the peak seen in September 2014.

Higher interest rates have recently acted as a deterrent, tempering demand and price increases in the secondary market. The report anticipates that a potential fall in interest rates in 2024 could make mortgages more affordable, stimulating buyer demand and exerting further upward pressure on prices.

Read this also : Dubai Taxi Lost and Found: A Quick Guide on Retrieving Your Belongings

Dubai’s luxury real estate sector continued to thrive in 2023, witnessing an impressive 89% growth in transactions over Dh15 million. The city’s lifestyle, favorable tax environment, long-term visa policies, and comparatively affordable luxury real estate attracted affluent investors globally, with an estimated 4,500 millionaires expected to settle in Dubai by 2023.

Despite delivering 34,810 homes in 2023, a modest 1.5% increase from the previous year, the market demands far exceeded supply, allowing prices to steadily rise. While developers announced over 80,000 new homes in 2023, these are not expected to be delivered until late 2025 or early 2026.

Read this also : Expo City Unveils Sky Residences: Your Gateway to Sustainable Living in Dubai

The report concludes that the movement towards end-user home ownership signifies the maturing nature of the market, instilling confidence in greater price stability in the years ahead. As new property handovers are anticipated to increase in 2024, aligning with the continuous influx of expats to Dubai, the market is expected to experience sustained growth at more sustainable levels, reflecting the evolution and maturity of Dubai’s real estate landscape, according to Richard Waind, CEO of Betterhomes.