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Dubai real estate market surges: Q1 2024 sales reach $29.9 billion

Off-plan sales volume reached 62%, while ready property sales volume stood at 38% in Q1 2024, revealed a report by Springfield Properties

Dubai real estate market surges: Q1 2024 sales reach $29.9 billion

The real estate market in Dubai experienced a significant surge in sales during the first quarter of 2024, reflecting high investor confidence and market liquidity. There was a notable demand for off-plan properties, indicating a shift in investment preferences towards the potential for capital appreciation and yield generation. Springfield Properties, one of the leading brokerage firms in Dubai, released its Quarter 1, 2024 Market Insights Report, providing a detailed analysis of the current trends and future prospects of the city’s residential real estate market.

An overview of transactions

The real estate market in Dubai saw a significant increase in sales from Q1 2023 to Q1 2024. In Q1 2023, there were 37,335 transactions totalling over $23.7 billion (AED 87.16 billion), while in Q1 2024, transactions amounted to 37,132, reaching over $29.9 billion (AED 109.8 billion). This surge in sales, approximately 25.94%, highlights the strong potential of Dubai’s real estate market.

Off-plan properties taking off in Dubai

In the first quarter of 2024, Dubai’s property market saw a significant increase in off-plan property transactions, with sales volume rising steadily each month. January started strong with 5,881 off-plan units sold, followed by 6,486 units in February and 7,601 units in March. Ready properties also saw an increase in sales from 3,961 units in January to 4,421 units in March. This trend suggests that investors are showing confidence in off-plan properties, possibly due to strategic developer initiatives and a high demand for new property developments.

Dubai’s real estate market is also witnessing a surge, particularly in off-plan properties which have reached a total of $13.7 billion (AED 50.4 billion) in transactions in the first quarter, far surpassing the $2.2 billion (AED 8.2 billion) in secondary sales. This significant difference indicates a strong investor interest in new developments. Despite the dominance of off-plan sales, the traditional market still holds relevance, as some investors may prefer completed properties. Rental prices are expected to increase alongside property values, presenting an opportunity for investors seeking rental income.

Dynamic rental yield

Between 2022 and 2023, average residential rents in Dubai surged by around 26%, reaching AED 92 per square foot by the end of last quarter. This notable uptick has propelled gross yields to 7.2%, surpassing the 6.8% recorded in 2022, as rental growth outstripped price appreciation.

Notably, the most significant rent hikes occurred in sought-after areas like DIFC, Jumeirah, and the Dubailand Residence complex, with increases ranging from 36% to 39%. Conversely, the lowest increase of 8% was observed in International City.

A solid investment inflow

Investment inflows in the UAE have surged by 55%, with 42% of new investors coming from international markets. The UAE government’s removing the AED 1 million minimum down payment requirement for Golden Visa eligibility has sparked interest among investors. This change is expected to attract a more diverse range of investors, leading to increased engagement in the property market and benefiting the overall economy. European investors are taking advantage of the Golden Visa programme by purchasing properties in Dubai to secure long-term residency. The demand for luxury properties in the Emirates has also increased due to the appeal of safety, education, and a modern lifestyle.

Key realty hotspots

In Q1 2024, Jumeirah Village Circle led in residential sales transaction volume in Dubai, followed by Business Bay, Downtown Dubai, Dubai Hills Estate, and Dubai Creek Harbour. However, when considering the average residential sales transaction price per square foot, Jumeirah Bay Island commanded the highest price, followed by Dubai Harbour, Bluewaters Island, Pearl Jumeirah, and Emirates Hills.

While Jumeirah Village Circle saw the highest volume of residential sales transactions, areas like Jumeirah Bay Island, with its higher average price per square foot, indicate a premium segment within Dubai’s real estate market.

Renting to ownership?

Developers innovate strategies to facilitate the transition from renting to property ownership escalating rents are prompting potential buyers to contemplate the prospect of property ownership instead of enduring continually rising rental costs. This sentiment is reinforced by the persistent upward trajectory of the rental market, which has remained solid even in the aftermath of the COVID-19 pandemic.

Projections indicating a potential 20% surge in prime residential areas of Dubai by 2024 only serve to amplify this trend. In response to the growing inclination among renters to transition into property ownership, favourable payment plans and incentives have emerged as key tools to attract these new buyers into the real estate market.

Among these, the one per cent offer has gained significant traction. This scheme effectively reduces monthly payments while extending the duration of the loan. repayment period. Under this plan, buyers typically provide a down payment of approximately 20%, followed by monthly payments equivalent to one per cent of the total property price until they attain full ownership, thereby facilitating a smoother transition from renting to property ownership.

Looking forward

The first quarter of 2024 has seen strong growth in Dubai’s real estate market, demonstrating its appeal to investors worldwide. The balance between off-plan and secondary market sales reflects a mature and dynamic landscape, showing investor confidence and market stability. Demand for luxury and waterfront properties remained robust, indicating the enduring appeal and resilience of Dubai’s property sector.