UAE Real Estate Sales Market Outlook 2023 – Trends and Forecast Report

2022 Recap – Recovery with Mixed Signals

2022 saw the UAE real estate market continue recovering from the pandemic slump:

• Sales volumes and prices both registered steady growth, indicating return of investor confidence.
• Prime areas like Dubai Marina, Downtown Dubai, Palm Jumeirah, Yas Island saw heightened demand and deal activity.
• But rising interest rates and inflation globally lead to some slowing in momentum towards end of 2022.

Overall 2022 put UAE firmly back on track after COVID-related interruptions. But global headwinds have emerging that could spill into 2023.

Factors Impacting 2023 Outlook

As we look ahead, some key factors could sway UAE’s property sales performance in 2023:

Rising Mortgage Rates

• As global rates rise to combat inflation, financing costs for UAE home buyers will increase.
• More expensive mortgages may deter buyers especially in higher price segments.

Employment and Population Growth

• If global slowdown impacts UAE economy and employment, it will soften demand from expatriate buyers.
• But UAE’s relative stability and safe haven appeal should sustain migration and occupancy.

Relative US Dollar Strength

• The strengthening US Dollar makes UAE property relatively cheaper for international buyers paying in other currencies. This can boost demand.

New Supply Alignment

• Developers are focused on aligning new project launches with actual demand to avoid oversupply. This market discipline will help sustain values.

Government Initiatives

• Initiatives like residency permits, flexible ownership laws, affordable housing programs support demand among target demographics like expat retirees and young professionals.

2023 Sales Projections – What to Expect?

Given above dynamics, housing sales in 2023 are likely to see:

• Volume growth moderate in high-end segments as rising rates and inflation impact buyers.
• But strong demand to continue for mid-market and affordable housing catering to end-users.
• Capital values may stabilize or see marginal 5-10% growth rather than rapid gains seen post-pandemic.
• Attractive payment plans, special deals, discounts used by developers to boost sales.
• Secondary/resale market to outperform new off-plan sales as buyers seek ready inventory.

Overall, 2023 is shaping up to be a year of moderation and stabilization for UAE real estate sales rather than 2022’s rebound momentum. But the market’s fundamentals and growth prospects remain resilient for long-term investors.

Final Thoughts

The UAE offers one of the most secure and stable real estate investments globally – underpinned by visionary leadership, business-friendly policies, and a dynamic, diversified economy.

While short-term headwinds may lead to some moderation in sales growth, the long-term outlook remains robust. For overseas investors, specialized brokerages like Touq Properties remain the best partners to identify value, align with market cycles, and capitalize on UAE’s immense potential.