Home sales in Dubai’s established luxury developments fell in 2023 – ZAWYA

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A segment in Dubai’s luxury property market is showing signs of slowing down, with sales of residential units in “traditional” premium neighbourhoods posting declines last year.

The total volume of sales transactions within Dubai’s established prime communities, where homes were priced at more than AED5 million each, dropped by 15.5% compared to a year earlier, reaching 1,968, said real estate consultancy firm CBRE, in a report on Thursday.

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Within the “super-prime” segment, which includes properties priced at more than AED10 million, the number of deals also fell by 3.1% to 1,003 over the same period.

The trend, which is primarily applicable to established locations and does not include nascent developments, is expected to continue this year.

Among the locations tracked for the study, Palm Jumeirah posted the highest volume of transactions in both the prime and super-prime categories, selling 963 units priced at more than AED5 million and 593 properties worth over AED10 million.

Prime and super-prime areas also include Downtown Dubai, Emirates Hills and Jumeirah Bay Island, among others.

Behind the declines

However, the slowdowns had something to do with lower activity in the off-plan segment of the market. While demand for high-end properties in Dubai remained strong, there weren’t enough units available in the market.

“In both the prime and super-prime segments of the market, these slowdowns in activity levels have been primarily underpinned by softening in off-plan sales, while secondary market sales registered significant increases,” CBRE said.

“Despite strong levels of demand given the mature nature of prime and super-prime locations, much of the available supply in the market has already been absorbed, and new launches have been very limited in recent months. This backdrop has led to a softening in transaction levels.”

If sales outside the so-called “traditional” neighbourhoods are considered, including those in nascent developments that are still only emerging as prime locations, overall sales of premium properties still registered “record” growth last year.

The total number of transactions for properties worth more than AED5 million went up by 54.5% to 10,296, while deals for units priced more than AED10 million reached 3,806, registering a growth of 68.4%

“The level of demand has been such that the vast majority of sales in these two segments have occurred in relatively nascent developments,” CBRE said.

“In traditional prime and super-prime locations, we have seen a slightly different trajectory take place, at least from a transaction volumes perspective.”

(Writing by Cleofe Maceda; editing by Seban Scaria)

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