The post-pandemic flurry of activity began to diminish in the latter half of the previous year, as economic uncertainty and rising interest rates deterred both buyers and sellers. Despite this, rents outperformed price growth. Average rental growth across 30 cities surged to four times the average capital value growth, thanks to the return of executive tenants and international students, who greatly influenced demand in the prime rental segment globally.

In 2022, Dubai experienced a remarkable 12.4% capital value growth, second only to Miami's 25.4%. Though lower than the heights of 2021, this growth was propelled by pent-up demand from international and domestic buyers, a scarcity of high-quality stock, and the inflow of high net-worth individuals, companies, and family offices. On the other hand, Singapore led the prime rental market growth with rates increasing by 26.2%. Lisbon and Dubai were not far behind, recording prime rental hikes of 25.4% and 22.9%, respectively, in the previous year. The appeal of the climate and quality of life these cities offer, bolstered by a sturdy business environment, magnetized a host of lifestyle purchasers.

Although transaction volumes dwindled towards the end of 2022, momentum has been evident in some cities in 2023. Predictions place Dubai and Singapore at the pinnacle of global price growth charts for the year, with anticipated gains ranging between 6% and 7.9%. Both cities are expected to witness continued influxes of high net-worth individuals. However, they remain susceptible to the challenges of higher interest rates and broader economic uncertainties.

2022 saw the UAE recovering robustly from the Covid-19 pandemic, marked by a resurgence in sectors like travel, hospitality, and real estate. This revival occurred against a backdrop of global economic uncertainties, primarily driven by inflation and rising interest rates leading to stalled economic growth. Nevertheless, the UAE has vigorously progressed with favorable economic policies. These policies have promoted long-term residency, simplified business setups, and amplified job opportunities. A thriving residential market, enhanced infrastructure, and relaxed social norms are further amplifying the UAE's allure to the global populace.

A recent report has detailed the themes of the UAE Property Market and their impact on the residential, office, and industrial sectors across Abu Dhabi, Dubai, and Sharjah.

How did Dubai's property market perform in 2022?

Sales in Dubai's real estate market soared to an unprecedented high in 2022. By the end of November, a whopping 88,028 transactions were logged, marking a sharp 46% Year-over-Year increase when juxtaposed with the 60,258 sales of 2021. For perspective, this volume of transactions is 38% above the market's prior record set in 2013.

It wasn't just the quantity of transactions that witnessed a surge last year. Transaction values too experienced a steep ascent. The Dubai real estate market's worth exceeded AED 240B, reflecting a 61% growth from the 2021 numbers. New ventures introduced by Dubai's property developers catered to the market's penchant for off-plan properties. Off-plan transactions constituted 44% of the total sales in 2022, a noticeable increment from 40% in 2021.

In 2022, the Top 5 most searched neighborhoods were Palm Jumeirah, Downtown Dubai, Jumeirah Village Circle, Jumeirah Beach Residences, and Jumeirah Lakes Towers. Moving into 2023, the most sought-after areas in Dubai include Palm Jumeirah, Downtown Dubai, Dubai Marina, Jumeirah Lakes Towers, Business Bay, Jumeirah Village Circle, Arabian Ranches, and Emirates Hills. Furthermore, the areas with the highest real estate transactions in 2023 are Al Barsha South Fourth (7,228 transactions), Dubai Marina (6,618), Business Bay (4,792), Wadi Al-Safa 3 (4,140), Burj Khalifa (3,526), Al Thanyah Fifth (3,417), Al Khairan First (3,333), Hadaeq Mohammed bin Rashid (3,207), El Merkadh (3,091), and Al Hebiah Fifth (2,288).