Posted inFeatures

Dubai’s real estate market experiencing robust growth, with the off-plan market accounting for 66% of the market share

Investors are investing in off-plan market due to the lack of affordable inventory in the market and a booming rental market, where prices have more than doubled in some areas post-pandemic

Dubai’s real estate market experiencing robust growth, with the off-plan market accounting for 66% of the market share

Sales transaction volumes in Dubai rose by 47.7% in May, reaching a total of 17,139 transactions. The growth reflects the continued high demand for properties in the city, with both UAE residents and international investors contributing to significant purchase activity, revealed a report by Property Monitor, which is part of Cavendish Maxwell. Moreover, in May, residential transactions made up 92.8% of sales, with apartments, townhouses, and villas being the most popular. Hotel apartments accounted for 2.6% of commercial property transactions, followed by office spaces at 1.9% and retail units at 1.4%.

The off-plan market continues to be a favourite

Investor activity in the real estate market was heavily focused on off-plan projects, which now make up 66.7% of the market share. According to experts, this trend is driven by a lack of affordable inventory in the market and a booming rental market, where prices have more than doubled in some areas post-pandemic. Besides, in May, 10,598 off-plan Oqood transactions were recorded, a 47.1% increase from the previous month, although the market share only saw a slight decrease to 61.8%.

During the month, Emaar Properties reclaimed the top spot in the off-plan market with a dominant market share of 17.3%. They recorded 1,728 transactions spread across various projects, including Parklane in Dubai Hills which saw 531 sales. Other notable projects included Lillia in The Valley, Ocean Point in Mina Rashid, and Vida Residences in Dubai Hills with 356, 207, and 175 sales, respectively.

Sobha was the next on the list at 12.7% off-plan transactions, with Sobha One in Ras Al Khor, leading from the front and recording 1,107 sales. Following closely was 330 Riverside Crescent in Sobha Hartland II and Verde in the DMCC Enterprise Zone. Azizi Development secured an 11.2% market share, with the majority of their 1,122 sales in Azizi Riviera buildings launched several years ago.

Mid-segment properties dominate the market

In May, properties in the mid-tier range of ($270,000-$816,000) AED 1-3 million dominated the market with a share of 51.5%, showing a 3% increase from the previous month. The low-price tier properties under $270,000 (AED 1 million) now make up 29.3% of the market, a decrease of 1.3% from April. High-end properties priced above $816,000 (AED 3 million) accounted for 19.2% of the market, down by 1.7% month-on-month.

What to look forward to?

New project launches have been strong this year, with over 59,500 units already released and on track to surpass last year’s total of approximately 96,000 units. The pace of launches is expected to continue without a summer slowdown. Hence, according to experts, if you are looking to make a purchase then you should keep an eye on communities like Meydan Horizon, Jumeirah Garden City, The Valley, and Motor City.

Despite high interest rates, borrowing activity in the mortgage market continues to be strong and mortgage volumes are expected to stay consistent in the coming months, with a slight decrease leading into Q4 in anticipation of a rate decrease at the November or December US FOMC meetings.

The market is not expected to slow down overall, but there may be a widening divide between off-plan and completed property sales. This could be due to the strong pipeline of off-plan projects and the seasonal migration of Dubai residents during the summer to escape the heat.