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Off-plan sales surges: Apartments account for 90% of transactions in Dubai

With more than one off-plan launch coming up each day, developers are picking up the pace to match buyers’ demand

Dubai: Off-plan sales surges with apartments accounting for 90% of transactions

Building on 2023’s momentum, Q1 2024 recorded a surge in transactions, setting a positive tone for the rest of 2024. Sales transactions in Dubai surged by 19.3% compared to Q1 2023, totalling 33,346 transactions. Meanwhile, the total sales value soared by an impressive 23.9% from the same period last year, reaching a substantial $23.1 billion (AED 85 billion).

Notably, off-plan sales drove the market, accounting for 57.4% of the transactions. Dubai’s investment appeal was also bolstered by its removal from the FAFT Greylist in Q1 2024. Sales transaction activity surged by 24%, with average prices increasing by 14% from the previous quarter. New buyer and seller registrations spiked by 49%, while total viewings saw a 50% increase. Villa and townhouse letting prices rose, leading to a 42% jump in transaction volumes compared to Q4 2023.

Off-plan dominated the sales

In terms of property types, apartments remained the preferred choice among buyers, accounting for 61% of all Dubai sales by volume, with a total of 27,357 transactions. Villa and townhouse sales followed closely, comprising 18% of the market’s sales value, with 5,989 transactions.

Off-plan sales were also a significant driver of the market, making up 57.4% of all transactions. Apartments were the most popular choice, accounting for 90% of off-plan sales. To keep up with the high demand, new projects were launched at an increased rate of one every 17 hours, compared to every 36 hours last year. The secondary market followed suit making up 43% of all sales volume in the market, and transactions stood at $11.83 billion (AED 43.4 billion).

Fintan Flannelly, Head of Developer Sales at Allsopp & Allsopp says, “In March alone, Dubai saw 7,768 off-plan Oqood transactions, marking an impressive 21.7% increase from February—levels that have not been seen in about 15 years in the market. With more than one off-plan launch coming up each day, we are seeing developers picking up the pace to match buyers’ demand.”

Finance buyers fuelling the growth

In Q1 2024, financing surpassed cash buyers with 53%, indicating a preference for payment plans. Cash buyers accounted for 47% of transactions. 80% of all transactions were for properties valued below $817,000 (AED 3 million), showing a demand for reasonably priced and off-plan properties, particularly from first-time buyers.

Lewis Allsopp, Chairman at Allsopp & Allsopp adds, “An interesting trend is the demand for affordable properties, specifically below the $817,000 (AED 3 million) mark, which accounted for almost 80% of all sales in Q1. With rental prices on the climb, alongside the growing appetite for off-plan properties, we are seeing more first-time buyers entering the market either to secure their homes or to obtain high-yielding investments for the near future.”

A diverse range of buyers

In prime residential areas in Dubai, there is a diverse range of buyers from various countries showing interest. Dubai Marina and JVC are popular among nationals from the UK, France, Germany, and India, while Business Bay attracts investors from India, the UK, and Italy. JLT sees investments from South Korea and Serbia, showcasing Dubai’s growing international appeal.

In Q1 2024, Arabian Ranches emerged as the favoured hotspot for villa and townhouse transactions, closely followed by Dubai Marina for apartment sales. British nationals topped the list of buyers in this quarter making up 23% of all sales, attracted by modern villas and townhouses.

Price point

Property prices in Dubai have reached $361 per square foot (AED 1,325 per square foot), showing a 7.4% increase from the previous peak in 2014. Experts predict that prices will continue to grow steadily in the first half of the year due to high buyer demand. The market has seen stable growth with low single-digit increases in most residential communities. In Q1 2024 alone, 25,700 new residents have moved to Dubai, indicating a positive market momentum that is expected to continue to rise in the coming months.