Dubai real estate market ‘momentum’ to slow down this year

Dubai will continue to attract strong demand from property investors and witness project launches this year, but the “momentum” in the market is expected to slow in the wake of global turbulences, according to Asteco. Mortgage transactions and project launches, in particular, are forecast to see some declines in 2023 compared to last year, as more rate hikes are implemented, and investors’ spending power is likely to weaken. On the positive side, sales prices and rentals rates will remain “elevated”, while the market will continue to boost its supply stock, as developers complete ongoing projects. In its report released on Monday, Asteco said around 47,700 apartments and villas will be added to the emirate’s housing supply this year, up by 53.8% from the number of homes delivered in 2022. The bulk of the units, around 40,000, will be apartments, while the remaining supply (7,700) will be residential villas. “We will continue to see new project launches [this year] but the momentum is expected to slow, as constrained global growth will impact the spending power of international investors,” Asteco said. “With more but smaller interest rate hikes expected in 2023, we anticipate a drop in mortgage transactions,” HP Aengaar, CEO of Asteco, also noted in the report. Inward investment Overall, Asteco said the UAE’s property market will continue to see “strong inward investment”, thanks to the country’s safe-haven status, advanced business reforms and visa-related initiatives. “This will have a positive impact on the real estate market, although we anticipate the excitement to subside and activity to slow in the wake of global turbulences, from which the UAE is ultimately not immune,” Asteco said. The consultancy firm also noted that the emirate and the rest of the UAE demonstrated an “impressive level” of resilience in the aftermath of the pandemic last year. It said the economic recovery, coupled with higher oil prices and a revival in tourism and trade, led to a significant jump in inward investment and record transactions. Last year, around 31,000 homes were delivered in Dubai, including 27,000 apartments and 4,000 villas. The volume of units that came on stream last year was not only significant, but it was also “impressive given the global economic challenges and supply-chain disruptions”, Asteco said. Project launches in the emirate also accelerated towards the end of 2022, while average leasing rates in the apartment and villa segments continued to climb. The villa market recorded a 23% increase in annual rental growth, while rental rates for apartments and offices jumped by 19%, according to Asteco. (Writing by Cleofe Maceda; editing by Seban Scaria) Cleofe.maceda@lseg.com

Dubai real estate market ‘momentum’ to slow down this year

DISCOVER MORE

Wasl unveils 3,800-unit Dubai gated staff accommodation project

Landlords raise rent on more than half of properties in England: ONS

Real estate leader on NY Fed board warns on commercial real estate risks

Dubai records over $264.30mln in realty transactions Friday

Dubai logs over $2.34bln in weeklong real estate transactions

Saudi: Arriyadh Development declares lower profits in 2022, dividends proposal

South African proptech leaders Flow secure $4.5mln in funding to enable the global property industry

Samana launches $54mln residential tower in Jumeirah

Banking turmoil: Fitch Solutions revise 2023 gold price forecast to $1,950 an ounce

2 African development banks invest $16bln in oil, gas projects

GCC central banks track US Fed move; hike key rates by 25bps

Will gold face more downside or upside after Fed's rate hike?

UAE exchange firm Al Ansari upsizes IPO on strong investor demand

Dubai's Meraas to build new residential towers in Design District

Dubai-based Samana launches $55mln Waves-2 residential project in JVC

Dubai records over $544mln in realty transactions on Wednesday

Dubai records over $626mln in realty transactions on Tuesday

Dubai records over $462.8mln in realty transactions Monday

LATEST VIDEO

VIDEO: LSE-listing will facilitate more funding opportunities for us, Dar Global CEO

ZAWYA COVERAGE

Will gold face more downside or upside after Fed's rate hike?

Kenya signs $250mln deal with UK to boost food production

PODCAST: IFC is ready to back governments privatisation plans with capital

UAE's Presight AI to debut on Abu Dhabi Securities Exchange next week

China supports accounting firms, including Deloitte, doing business in the country

Dubai: Some private schools start notifying parents about fee hikes

UAE: Public transport fare ranks among the cheapest in the world, says new study

Ancelotti to Brazil would be a no-brainer, CBF president says

German workers' strike over pay is matter of survival, union boss tells Bild

THE BRI REPORT

China is reshaping the Belt and Road Initiative ahead of a post-pandemic era

DISCOVER MORE

LATEST VIDEO

ZAWYA NEWSLETTERS

ZAWYA COVERAGE