In Dubai, the real estate market has seen significant growth, with more than 80 per cent of new property units launched since 2022 already sold out. This high demand for off-plan projects has led to the launch of hundreds of billions of dirhams worth of real estate projects by both local and foreign developers. According to Dubai Land Department data, there have been nearly 214 projects launched, with 148 of them still active.
CBRE’s head of research for the Middle East, Taimur Khan, stated that around 70 per cent of units launched since 2022 have been sold, with even higher rates of over 80 per cent in Dubai’s core and established residential areas. Many developers have been able to sell out their entire inventory post-pandemic, some in just a few hours to a day. The demand is being primarily driven by end-users and residents looking to purchase their own property rather than renting in Dubai’s hot market.
In May 2024, the total volume of transactions in Dubai reached a record high of 15,766, showing a 44.2 per cent increase compared to the previous year. Prices have also surpassed the previous peaks seen in 2014, with an average price of Dh1,360 per square foot in May 2024, 10.25 per cent higher than the previous peak in September 2014. The influx of new supply is expected to provide some relief to the rental market, but is unlikely to create downward pressure on sales prices.
Real estate consultancy CBRE noted a shift in market dynamics since 2019, where sales transactions were previously concentrated in Dubai’s core and prime residential areas. However, recent data shows buyers are now moving away from these areas due to limited supply and higher costs associated with properties in established locations. This shift is a result of the changing market backdrop and the increasing demand for real estate in Dubai.
Overall, the real estate market in Dubai continues to show strong demand, with high absorption rates of new stock and increasing sales transactions. The majority of demand for off-plan projects is coming from owner-occupiers, indicating a long-term trend towards property ownership. While the increase in supply may help alleviate pressure on the rental market, it is unlikely to lead to a decrease in sales prices in the foreseeable future. Stay updated with the latest news and trends in the Dubai real estate market to make informed decisions.
