Prime Dubai real estate hit record levels in 2023; prices increase up to 35.6% and tipped to grow this year – Arabian Business

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The Dubai real estate sector saw record activity in the prime and super prime segments last year, according to CBRE analysis.

Along with record numbers of properties worth more than AED5m ($1.36m) and AED10m (2.7m) changing hands, prices in certain areas increased by up to 35.6 per cent.

Buy/sell, rent/lease residential &
commercials real estate properties.

Prices for the prime and super prime properties are tipped to go up again this year, CBRE said.

Dubai real estate record

Sales of properties worth more than AED5m ($1.36m) and AED10m (2.7m) in Dubai hit record levels in 2023, reaching 10,296 and 3,806.

This was an increase of 54.5 per cent and 68.4 per cent from a year earlier, respectively.

Off-plan sales in both segments of the Dubai real estate market have been the primary drivers of activity, where, in the AED 5m+ and AED 10m+ segments of the market.

Off-plan sales accounted for 67.2 per cent and 70.8 per cent of total transaction volumes, respectively.

The level of demand has been such that the vast majority of sales in these two segments have occurred in relatively nascent developments, where many of these developments are still only emerging as prime locations.

In traditional prime and super-prime locations, CBRE analysts identified a slightly different trajectory take place, at least from a transaction volumes perspective.

Prime and super-prime areas are defined as follows:

  • Downtown Dubai
  • Emirates Hills
  • Jumeirah Bay Island
  • Palm Jumeirah
  • District One

Prime properties refer to properties sold in these areas for more than AED5m, and super-prime properties those sold for more than AED10m in Dubai.

In 2023, the total volume of sales transactions within the prime segment of the market declined by 15.5 per cent compared to the year prior, reaching a total of 1,968.

Over this period, within the super-prime segment of the market, the number of transactions stood at 1,003, marking a decline of 3.1 per cent compared to a year earlier.

Among the communities tracked by CBRE, in 2023, Palm Jumeirah registered the highest volume of transactions in both the prime and super-prime market segments, with the total number of units sold worth more than AED5m standing at 963 and the total number of properties sold above AED10m reaching 593, over the same period.

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.

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.

Emirates Hills is a prime residential district in Dubai

According to CBRE, this backdrop has led to a softening in transaction levels, in 2024, and is something the real estate and investment specialists expect will be the case in the broader AED5m+ and AED 10m+ markets.

As at Q4 2023, average prices within the prime segment of the market stood at AED4,604 ($1,254) per square foot, marking an increase of 22.5 per cent from a year earlier.

This growth has been underpinned by significant price growth in the likes of Jumeirah Bay Island and District One, where average prices grew by 35.6 per cent and 27.2 per cent year-on-year.

More so, in Q4 2023, the average sales value of prime residential assets within the communities that CBRE monitors reached AED28.3m ($7.7m).

Looking at the super-prime market segment, average prices registered a growth rate of 20.4 per cent in the year to Q4 2023, reaching AED4,900 ($1,334) per square foot.

Taimur Khan cbre
Taimur Khan, Head of Research – MENA at CBRE

Over this period, Jumeirah Bay Island and District One in Dubai recorded the most significant increases in their average sales rates of 28.5 per cent and 22.4 per cent, respectively.

Super-prime units within selected submarkets monitored by CBRE registered average selling prices of AED34.1m ($9.3m) in the last quarter of the year, supported by high-value transactions on Emirates Hills and Jumeirah Bay Island.

Taimur Khan, Head of Research – MENA at CBRE in Dubai, said: “In the year ahead, we expect that given the lack of new supply, price growth in the prime and super-prime segments of the market are likely to remain relatively strong, although we do expect the rate of price growth to taper off somewhat slightly.”

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