The Dubai real estate market has seen continuous growth with record sales across all sectors. Notably, the end-user market which increased from 2020, due to the stability of the Emirate, has seen villa/townhouse prices increase due to low supply.
Luxury properties in Dubai continue to attract high-net-worth individuals and investors looking for premium real estate opportunities. The city’s iconic landmarks, upscale amenities, and luxurious lifestyle offerings contribute to its appeal as a prime real estate destination.
The number of individuals in Dubai with liquid investment wealth — or assets that can be readily converted to cash — of $1 million or more increased by 78% between 2013 and 2023 to 72,500, according to the World’s Wealthiest Cities Report 2024 from Henley & Partners, in collaboration with New World Wealth.
It’s worth noting that Dubai’s real estate market is subject to various factors, including economic conditions, government policies, and global events.
Population – Residents
Dubai is on track to hit the 2040 plan of population growth with an increase of residents from 3,661,983 at the beginning of Q1 of 2024, to 3,745,005 as of 12th July 2024, an increase of 2.3%, compared to 1.45% increase in the same period of 2023. If the population increases at this steady rate the Emirate will reach just over 5.5m by 2040.
(Source: Dubai Statistics Center)
Other Key facts
Average Price Per Sq Ft
ROI Comparison of Dubai vs. Other Global Cities
Return on Equity, Examples – Off Plan Resale
The Valley by Emaar
The equity at the time of sale in the property was 60% of the original price of AED743,333. The premium paid was AED1,161,113, representing a 56% increase over a period of 3 years.
Initial Purchaser in The Valley by Emaar – Sold at launch for 1,238,888 on a 60% during construction and 40% post handover (transferrable to new buyer).
Ready Property Appreciation Example
Marina Quays, Dubai Marina, 3 Bedroom apartment
The property was sold on the 4th April 2023 for AED3,900,000 and re-sold May 2024 for a premium of AED1,020,000, a 25.6% increase in 13 months.
Is the market heading for a downtown? Are prices increasing too much?
The answer lies in the simple rule of economics, the Emirates is getting an additional 8,000 plus residents per month, the demand outweighs supply in the majority of projects being launched and sold out, and ready properties, correctly priced are selling with a maximum of 4 weeks of being on the market.
UBS reported in 2022 that Dubai was ‘fair valued’ and is often compared to the top ten most expensive cities to live in, but the prices do not match by far. The additional appeal is Dubai’s Government, they ensure safety, good education, medical care, and a good life for multiple nationalities. With strategic planning stretching to 2070, Dubai is organized, regulated, and accommodates all industries as well as being in the center of the world with great travel options for business and pleasure.
The premiums and returns on equity show that there are large returns to be made on buying off-plan or ready properties, and we can confidently say that for at least the next 2-3 years.
Property Launches – Developer
Supply
The total number of properties completed was just 30% of the residential supply compared to the increase in population in 2023 and with only 101 projects at 75% construction or more the supply will still be lessor than the influx of residents.
Main Areas for Completed Properties:
Arabian Ranches 3, Business Bay, Tilal Al Ghaf, JVC, Arjan, Meydan
Upcoming for the remainder of 2024
Sales Transactions H1 2024
Off Plan Registrations Initial Sale (direct from the developer):
Top Areas – in order
JVC, MBRC, Dubai Hills Estate, Arjan, Town Square, Dubai South
Off Plan Registrations Resale (before completion):
Top Areas – in order
Business Bay, MBRC, Dubai Creek Harbour, Dubai Harbour, The Valley, Damac Lagoons
Top tip – if you are looking to resale an off plan unit the highest premium in recent months has been within 6 months of completion
It is important to note that the transactions not all sales will be made in 2023 but this is to give a close indication of sale. The reason for this is that the Oqood Registration generally happens anytime up to 3-4 months after the signing of the reservation form.
Sales Transactions H1 2024 – Resale Ready
Top Areas – in order
JVC, Dubai Marina, International City, Emirates Living, Dubai Sports City, Dubai South
Mortgage Transactions
Since 2020, and the fast recovery of the pandemic many tenants have switched from leasing to buying. This is shown in the below with mortgages hitting their peak in Q2 2024.
Banks are processing:
Rentals
The rental market has seen accelerated prices in the past year, this is due to high demand, low supply, particularly of townhouses and villas, and changes in the rental calculator to assist landlords sin recovering a market price after the severe drop in covid times.
Example of Pricing in H1 – new contracts
Commercial 2024
The commercial real estate market in Dubai is known for its high demand and competitive nature. Dubai is a major business hub in the Middle East, attracting companies from various industries to establish a presence in the city. This has led to a significant demand for office spaces, retail outlets, and other commercial properties.
In H1 of 2024 – 1,481 offices transacted 25% increase in sales from the same period in 2023
What is happening now?
written by Laura Adams, Sales Director at Provident Real Estate
Data from propertymonitor, Dubai Statistics Centre, Datafinder.ae