Dubai is becoming a leading gateway city to live, work and play, underpinning its residential and commercial real estate demand, according to the report by Cushman & Wakefield Core. The highest number and value of secondary market transactions was recorded in Q3 2022.
About 5,700 units were delivered in Dubai in Q3 of 2022, amounting to 19,000 units delivered YTD 2022, while a further 13,500 units are expected to be delivered in Q4 2022, moving yearly forecast downward from 38,000 to nearly 32,500 units, according to the report.
“This year, Dubai recorded the highest number of sale transactions above AED100 million (16 transactions recorded YTD 2022 in the secondary and off-plan market compared to a total of 5 transactions in 2021)” Prathyusha Gurrapu, Head of Research and Advisory, Cushman & Wakefield Core.
Transaction volumes show no signs of slowing down, overall secondary market transactions in Q3 2022 saw a 49 percent increase compared to Q3 2021, and the off-plan market witnessed a 60 percent rise.
“The sharp rise in off-plan transactions creates an inherent risk, and while there are stronger regulations in place now, should demand be impacted in the coming quarters due to rising interest rates, inflation, a strong dollar to which the AED is pegged along with rising sales prices, this may become a cause of concern,” Gurrapu explains.
As most districts have witnessed over 25 percent increases, the sharp rise in rents is impacting affordability and is a cause of growing concern for tenants.
“The overarching theme of the office market is that of ‘demand outstripping supply’ due to sharp rises in occupancy levels and very limited centrally located quality stock available in the market,” Robert Thomas, Head of Agency, Cushman & Wakefield Core.