DUBAI — The cost for the average apartment in Dubai has risen 20% in the past 12 months through August 2023, the largest hike in nearly a decade, according to the American commercial real estate services and investment firm CBRE Group.
Dubai apartment sales are seeing their highest growth since November 2014, according to CBRE’s Dubai Residential Market Snapshot report released Monday.
There were a total of 11,328 transactions in Dubai’s residential market in August 2023, the second highest monthly figure ever registered. Off-plan sales, sales of undeveloped properties bought directly from the developer, led this growth with a 58.7% increase compared to sales of existing properties, which fell 10.2%.
The year to date has seen the most transactions ever for this period, with a total of 79,605 units bought and sold.
Apartments make up about 85% of the housing supply in Dubai, according to Bloomberg. The city’s real estate market has rebounded from a seven-year slump thanks to a stream of crypto millionaires, bankers relocating from Asia and Russians looking to protect their assets amid their country’s war on Ukraine.
Rents hit new highs in Dubai this year, powered by the Russia-Ukraine war and the global economic downturn that in addition to causing oil and commodity prices to soar, led to an increase of Russians investing in Dubai real estate. From August 2022 until the same month this year, average prices rose by 20% and average villa prices rose 17.3%, CBRE reported.
The average annual rent for apartments stands at just over $29,000, and $87,835 for villas, according to the real estate advisory group.
Along with Qatar and Turkey, the United Arab Emirates has been a major recipient of Russian real estate investment in addition to direct financial injections, Ryan Bohl, a senior Middle East and North Africa analyst at the Risk Assistance Network + Exchange, told Al-Monitor in February 2023.
Dubai’s luxury residential market became the fourth most active in the world in 2022, reaching this position for the first time ever, according to global property consultant Knight Frank’s 2023 Wealth Report published in March. There were 219 luxury Dubai home sales that exceeded $10 million in 2022, ranking behind New York City in the top spot with 244 sales, Los Angeles with 225 and London with 223.
The amount of global wealth being injected into Dubai and greater UAE real estate is threatening to price out middle income expatriate residents, reported Samuel Wendel, a senior market research analyst for Al-Monitor Pro, in May this year. The growing trend is raising fears that an expat exodus could alter Dubai and the greater UAE’s reputation as a global business hub, he added.