Real Estate Predictions 2023

Dubai Market Review

Here are key findings regarding the state of Dubai's real estate sector:

1. Recovery Factors: The real estate market in Dubai has rebounded thanks to pent-up demand from travelers and increased spending by residents following the pandemic.

2. Inflation Concerns: Inflation is a concern for consumers and is expected to impact sentiment, potentially leading to price increases and higher rents in 2023.

3. Occupancy and Rates: The average occupancy rate for Dubai reached 72% by the end of 2022, compared to the same period in 2021. Average daily rates (ADR) have also risen by 22% year-on-year to AED 674, outperforming most regional and international markets.

4. Residential Property: Average sales prices for residential properties in Dubai increased by approximately 10% between Q3 2021 and Q3 2022. Average rents saw a significant uptick of around 21% over the same period.

5. Office Space: Office rents have bounced back to pre-pandemic levels, recording a 12% increase by the end of 2022 compared to the previous year.

6. Retail Sector: The retail sector experienced recovery driven by consumer spending growth, both in online and traditional mall formats. The Economist Intelligence Unit (EIU) predicts a 4.2% increase in total UAE retail sales volume in 2022, with an expected average growth of 3.9% from 2023 to 2026.

7. Warehousing: Average warehouse rents continue to recover due to strong demand from logistics companies. Freight movements at airports have exceeded 2021 levels by 3% at Dubai International Airport (DXB) and 5% at Dubai World Central (DWC).

In summary, Dubai's real estate market has seen a notable post-pandemic recovery, with various sectors, including residential, office, retail, and warehousing, showing positive trends and increased activity. Inflation concerns and consumer spending continue to play significant roles in shaping market dynamics.

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