Off-Plan Sales Tumble 70% in Dubai Real Estate by the end of 2023 – CBRE
Dubai’s property market witnessed a slowdown towards the latter part of 2023, with a significant decrease in off-plan sales, as the consultancy firm CBRE reported. According to the firm’s latest report, off-plan sales plummeted by nearly 70% in December.
The residential market saw a total of 6,216 transactions during the month, a drop of 30.3% compared to the previous year. This decline was primarily driven by a 69.7% fall in off-plan sales, although there was a 35.3% increase in sales of secondary homes.
The luxury housing market also experienced a slowdown, particularly for properties above AED 5 million ($1.3 million). In 2023, the prime segment recorded 1,968 deals, a decrease of 15.5% from the previous year.
The super-prime segment, which includes properties valued at over AED 10 million, saw a 3.1% reduction in transactions, totalling 1,003 deals. Notable areas within the prime and super-prime segments include Downtown Dubai, Emirates Hills, Jumeirah Bay Island, Palm Jumeirah, and District One.
In the rental market, demand remained relatively high, although further moderation was observed. CBRE noted that the rate of rental growth has softened throughout the year. As of December 2023, average residential rents in Dubai had increased by 18.9%, slightly down from the 19.2% growth in November 2023.
Overall Performance in 2023
Despite the significant decline in off-plan real estate transactions in December and the slow uptake of premium properties throughout the year, Dubai’s property market still achieved a strong performance in 2023. The total volume of transactions reached a record 118,993, marking an increase of nearly 30% compared to 2022.
Off-plan transactions during the year rose by 31.9%, and secondary market deals increased by 26.3%.
While CBRE did not provide a forecast on whether the softening in the prime and super-prime segments and the recent decline in off-plan sales will persist into 2024, the firm expects rental growth to continue moderating but remain positive.
Taimur Khan, Head of Research at CBRE, stated, “We expect that rental growth will continue to moderate. However, it will remain positive in 2024.”
