The real estate market in Dubai has witnessed a surge in demand for off-plan projects with more than 80 per cent of the new property units launched since 2022 being sold out. Local and foreign developers have launched projects worth hundreds of billions of dirhams, with nearly 214 projects launched and 148 of them active, according to Dubai Land Department data. Despite concerns about oversupply potentially dampening prices, the absorption of new stock remains high, with at least 70 per cent of units launched since 2022 already sold.
Post-pandemic, many developers have experienced quick sell-outs of their inventory, with some selling out their projects within a day or even just a few hours. The demand for residential properties in Dubai continues to be driven by end-users and residents looking to purchase their own property to avoid the red-hot rental market. In May 2024, the total volume of transactions reached a record high of 15,766, marking a 44.2 per cent increase compared to the previous year, with prices also surpassing previous peaks witnessed in 2014.
According to Property Monitor, the average price per square foot in Dubai stood at Dh1,360 in May 2024, 10.25 per cent higher than the previous peak in September 2014. The off-plan market is seeing significant demand from owner-occupiers, which is expected to provide relief to the rental market in the longer term. However, this increase in supply is unlikely to create downward pressure on sales prices, according to CBRE’s head of research for the Middle East, Taimur Khan.
CBRE’s monthly report highlights a shift in market dynamics, with sales transactions moving away from Dubai’s core and prime residential areas towards more affordable locations due to the high costs associated with acquiring properties in established neighborhoods. The trend indicates a changing preference among buyers seeking affordable options in the real estate market. Overall, the strong demand for properties in Dubai continues to drive sales, with prices reaching new highs and off-plan projects attracting a significant number of owner-occupiers.
