In 2023, Dubai’s real estate market witnessed unprecedented growth, achieving record-breaking transaction activity in the residential sector. According to a recent report by global real estate services provider Savills, the residential sector experienced a remarkable 29 percent annual growth, reaching an all-time high of 118,200 units sold, marking the first time transactions surpassed 100,000 in the emirate.

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This surge in activity can be attributed to various factors including Dubai’s growing and diversified economy, recent policy changes such as adjustments to the requirements for real estate investors to qualify for the Golden Visa, and the city’s expanding expatriate population.

Savills’ Dubai Property Market Report for 2023 highlighted the dominance of under-construction properties in meeting demand, with 55 percent of units sold being off-plan. While end-user activity slightly decreased, there was a notable shift towards investment-driven transactions, particularly in the latter half of the year.

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Key areas witnessing heightened transaction activity included Dubai Sports City, Arabian Ranches, Jumeirah Village Circle, and Dubai Hills Estate. Apartments remained the most transacted property type, constituting 78% of all transactions.

Looking ahead, Swapnil Pillai, Associate Director of Research at Savills Middle East, emphasized the real estate industry’s positive outlook, fueled by the expansion of non-oil sectors and favorable growth prospects. However, Pillai noted the risk of oversupply in select assets and locations, which may moderate future price increases.

The office real estate market also experienced a surge in demand in 2023, driven by government initiatives to promote job creation and economic growth. High-quality, green-certified assets were particularly sought after, reflecting a growing emphasis on sustainability.

The Dubai International Financial Centre (DIFC) emerged as a highly sought-after micro-market, witnessing a substantial increase in rents, especially in Grade A developments. Mergers and acquisitions activity further fueled demand for office space across the city.

Additionally, co-working space providers experienced steady growth, catering to the demand for flexible and affordable workspace solutions.

In the industrial and logistics sector, Dubai saw resilient growth, with demand expected to remain robust in 2023. High-quality warehouse facilities, especially those exceeding 10,000 square meters, remained scarce as occupiers sought modern, sustainable spaces to accommodate future expansions.

Overall, Dubai’s real estate sector in 2023 was characterized by expansion, driven by new market entries, consolidation activities, and a growing emphasis on sustainability and operational efficiency.