Market Insights: October 2023

This signals a stabilisation in values as investors and speculators recognise this longstanding watermark

New launches add 11,500 units into the market, highlighting confidence in ongoing growth

Dubai's average property prices have equalled the previous all-time high, rising by 0.14% in October.

According to the Property Monitor Dynamic Price Index (DPI), current prices stand at AED 1,234 per square foot, mirroring the peak value of September 2014 - the almost decade-long recovery represents a major capital value watermark and the market may hover at this level before pushing on through 2024.

The ongoing market cycle has spanned 36 months, witnessing a 41.8% overall price surge, growing at a steady monthly average of 1.2%. This contrasts sharply with the prior cycle, characterised by aggressive price hikes of over 2% per month across a shorter 24-month period, averaging 1.6% monthly appreciation. The current scenario signals increased stability and reduced speculative activity, poised to continue into the coming year, barring significant disruptive events.

The AED 10m+ price tier surged by 2.8% in October, marking a historic high of 6.1% market share, surpassing the earlier record of 5.4% set in July. This growth owes much to successful sales at Palm Jebel Ali, with ultra-luxury villas averaging AED 8,760 per sq.ft. Conversely, the AED 2-3m tier dropped by 2.4%, declining to 15.4% market share.

Additionally, and somewhat counter-intuitive to recent trends, the <AED 500k price tier witnessed notable growth, expanding by 1.4%. This increase predominantly stemmed from studio sales in the Azizi Riviera master development, with initial developer sales averaging AED 1,481 per sq.ft, and resales slightly higher at AED 1,529 per sq.ft.

Investors will note the continued evolution of the market throughout 2023. Categorising the nine price tier segments into three main tiers, the mid-tier properties ranging from AED 1m to 3m retained the largest market share at 40.4%, contracting by 2.3%. Properties valued under AED 1m increased to represent 34.2% of the market, up by 0.9% from September. Simultaneously, high-end properties over AED 3m claimed 25.4% of the market, marking a 1.4% rise month-on-month.

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