UAE’s leading home search platform, Property Finder announced results from its latest Market Watch for Q2 2023, revealing a significant rise in off-plan transactions and sustained momentum in sales of existing properties, complemented by a remarkable growth in value across Abu Dhabi and Dubai.
Growing confidence from buyers setting new records in Abu Dhabi
Solid investor confidence, a notable uptake in new projects and the introduction of innovative developments made Q2 a remarkable quarter in Abu Dhabi. This was majorly driven by 1,838 off-plan transactions, as opposed to 947 transactions in Q2 2022, representing 71.4% of the total transactions, compared to 60.7% in Q2 2022. Also recording a significant YoY surge by 94.1% in terms of volume along with 118% increase in value for the same period. The off-plan sales transaction value in Abu Dhabi for Q2 2023 contributed to 71.9% of the total sales transactions value compared to 58.7% in Q2 2022 by reaching AED 4.704 billion compared to AED 2.157 billion.
Simultaneously, the existing/ready market in Abu Dhabi registered 735 properties compared to 612 in Q2 2022, representing around 28.6% of the total transactions compared to 39.3% in Q2 2022; witnessing a notable growth of 20.1% compared to Q2 2022. Property Finder proprietary data revealed that Al Reem Island, Yas Island, Al Raha Beach, Saadiyat Island, and Masdar City still remained the preferred choices for those who want to own an apartment for investment or residence purposes in Q2 2023.
A fast evolving market shapes the way forward for property buying in Dubai
Dubai’s move to ownership seems to only be getting bigger with 30,098 transactions compared to 20,322 in Q2 2022, recording a sharp increase of 34.84% YoY. At 51.12%, while existing/ready transactions may have played a greater role in the total sales transactions, off-plan deals inched closer at 48.88% accounting for almost half of the volume. This is in contrast to Q2 2022, where ready transactions made up for 60% of the total volume, while off plan made for 40%. The evolving trends are actively driving the market towards a new quarterly record and shaping the future agenda for UAE’s real estate sector.
In Dubai, the market value for sales transactions recorded the highest value ever for a quarter by reaching AED 90.75 billion compared to AED 58.96 billion in Q2 2022. The market value increased by 53.93% compared to Q2 2022, contributing to a steady demand for housing and promoting strong economic growth, as well as bolstering foreign interest for the tourism industry.
Off-plan sales values also witnessed a record by reaching AED 35.06 billion transactions in Q2 2023 compared to AED 18.34 billion in Q2 2022, recording a 91.18% increase. Existing/ready sales transactions values hit a new high of AED 55.7 billion in comparison to AED 40.6 billion in Q2 2022, marking a remarkable increase of 37.11%. This is the highest transaction value ever recorded for a quarter with a 4.2% increase from Q1 2023.
On the other hand, in terms of rental contracts, Q2 2023 saw a year-on-year increase of six percent by registering 131,293 contracts compared to 123,856 contracts in Q2 2022. It is noteworthy that tenants changed their behavior, choosing to own a home instead of renting, driven by the surge in average market value for renting. Most searched localities included Dubai Marina, Downtown Dubai, Business Bay, Jumeirah Village Circle, Palm Jumeirah, Dubai Hills Estate, Arabian Ranches, Damac Hills and Al Furjan.
July highlights great opportunities for Q3
As we enter Q3 2023, Property Finder’s monthly data insights have also revealed interesting emerging trends in the industry. July 2023 witnessed a remarkable milestone in the real estate market, recording the highest sales transaction value ever reported for a single month, amounting to over AED 37.5 billion. This impressive figure represents an extraordinary 81% year-on-year increase compared to July 2022, surpassing the previous market peak recorded in March 2023 by 10%. Moreover, the volume of transactions reached 11,000, making for a significant record and indicating a substantial year-on-year increase of 58%.
The primary driving force behind this surge were the existing transactions, which achieved an unprecedented record value of transactions, crossing AED 25 billion. This outstanding data reflects an impressive year-on-year increase of around 72% and a substantial 17% rise compared to the market peak recorded in March 2023, with a total of more than 5,800 transactions. The volume of these transactions also experienced substantial growth, with a remarkable 42% year-on-year surge.
Notably, off-plan transactions played a pivotal role in supporting Dubai’s real estate market uptrend during July. Accounting for 47% of the total sales transactions and 33% of the total transaction value, off-plan transactions contributed significantly to the overall market performance. The volume of off-plan property sales witnessed an exceptional 81% year-on-year increase, recording more than 5,200 transactions in contrast to 2,883 in July 2022. This surge in activity was also reflected in the value of off-plan properties, which soared by almost 102% to exceed AED 12 billion, surpassing the AED 6.12 billion recorded in July 2022.
Reflecting upon a promising quarter, Cherif Sleiman, Chief Revenue Officer, Property Finder said, “We are seeing an increased uptake in off-plan properties. Whether this is due to increased investor confidence or the rising demand for ownership led by recent socioeconomic government strategies, it is great to see the UAE’s vision become a bigger reality in Q2 2023. As we enter Q3, we believe a lot of potential is yet to unfold. At Property Finder, we look forward to giving our home seekers everything they need to make the best decision in their home search journey.”