For those that have been scanning the real estate headlines so far in 2023, one thing has become abundantly clear – Dubai remains an unstoppable juggernaut. In the first six months of the year, the city earned the crown of the world’s busiest luxury property market, surging well ahead of New York and Hong Kong in Q1 alone. By the end of June, the market had already recorded 80% of the prime and super prime sales volume that was recorded in the entirety of 2022. That momentum remained steady in Q3 as well, as AED97.5 billion ($26.5 billion) worth of transactions were recorded, a growth of 40% from the same period last year.
Numbers like that haven’t been seen in the market for quite some time, and understandably, there are concerns about how long that pace can be sustained. History has shown that growth without boundaries leads to an inevitable collapse, and questions have arisen around the boundaries of Dubai’s current growth rate. It’s important to understand, however, that Dubai is in a vastly different position than it was about a decade ago. The city that once held a reputation for selling dreams has become known for the stunning realities that it is able to build. Man-made islands, beautiful branded resorts, skyscrapers with unique architectural footprints – these are not just renderings on a computer screen. They are ideas that have been brought to completion, projects that have become exclusive addresses. And that is being noticed. Global buyers are no longer investing in the idea of what Dubai can be – an important factor in what led to market downturns previously. They are investing in the city that it is and that it is shaping up to be with a greater level of confidence.
And ‘confidence’ is the key word that is driving the market right now. The deftness with which Dubai handled the pandemic and post-pandemic life was remarkable. A grand-scale global event like Expo2020 was successfully hosted by the city at a time when global giants like London and New York were still trying to chart a way forward through pandemic-related issues. This gave visitors from around the world an opportunity to discover what Dubai really had to offer beyond its Instagram-friendly glamorous image and to understand the sort of lifestyle it could provide. As it turned out, it was a lifestyle they really wanted.
“Dubai has invested quite heavily in developing and improving its infrastructure – not only around the city, but also in its legislative systems,” says Mark Castley, CEO of highly reputed luxury brokerage LuxuryProperty.com. “The Real Estate Regulatory Authority (RERA), which was established in 2007, has built a robust framework that forms the backbone of every property transaction in Dubai and guards the best interests of property buyers and tenants. This is a market that has safeguarded itself against the formation of another property bubble, which has helped to bring more inward real estate investment.”
The first month of Q4 is almost over and it looks very likely that another spate of records will be achieved or broken in this quarter. It has become a bit cliche already to say that it is the ‘best year ever for real estate in Dubai’, but cliches do have some truth in them. Property prices have increased by unprecedented levels but are still fairly valued on a global scale, supply is low but new projects continue to be released at a steady rate, and demand for Dubai real estate remains on an upward incline. It certainly seems like the market will live up the cliche by ending on a high note.
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