A PROPERTY boom in Dubai that pushed the number of residential transactions to a record high last year has continued into 2023, with sales surpassing those levels in the first 10 months of this year. 

The Middle East’s tourism and financial hub recorded 93,590 transactions through to the end of October, surpassing 92,178 in all of 2022, according to CBRE Group. Still, the number of sales slowed in October, falling 23.6 per cent from a year earlier as developers offered fewer new off-plan projects.  

“Demand hasn’t weakened even as monthly transactions have started to slow because fewer new projects are being started,” Taimur Khan, CBRE’s head of research, said in an interview. “The absorption that we have seen within the off-plan segment of the market has been almost unprecedented.”

Dubai’s property market has broken a decade-long record for total home sales and seen rents jump to unprecedented levels. That rebound from a seven-year slump has been fuelled by an influx of foreigners – from crypto millionaires and bankers relocating from Asia to wealthy Russians seeking to shield assets. The government also relaxed visa laws and introduced permits for jobseekers and freelancers.

Off-plan developments have seen a surge in demand since 2022, with 90 per cent of all homes in prime and core locations already sold. Just over 67 per cent of such properties across the city have also garnered buyers, according to CBRE. 

Such properties are popular in Dubai as they allow buyers to enter the market at lower prices compared to existing homes. Most developers tend to complete projects within a two-to-three year period. 

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Last week, about 800 homes in a new Dubai residential development sold out within hours generating US$844 million for the firms backing the project, which includes Abu Dhabi’s main developer Aldar Properties PJSC. Construction of the first phase of the development is due to begin in the second quarter of 2024.

Meanwhile, average home prices climbed 19.1 per cent in the year through October, slowing from a month earlier. The rate of increase for rents is also slowing, rising 19.7 per cent in October, slightly lower than the 20.6 per cent growth registered a month earlier, according to the real estate adviser. BLOOMBERG