Dubai Property Market Update - May 2024

Resilience and Growth Amidst Adversity

Dubai's property market continues to demonstrate remarkable resilience and growth, recording another month of significant achievements. Despite external challenges, including a weeklong public holiday and unexpected severe weather conditions, the market has achieved a commendable 1.95% increase in property prices and a year-on-year sales volume surge of 44.3%.

Dynamic Price Index (DPI) Highlights

The Property Monitor Dynamic Price Index (DPI) shows that Dubai property prices are currently standing strong at AED 1,351 per square foot. This represents a 9.5% increase over the previous all-time high, marking it as the second highest monthly sales volume recorded for April. The DPI further reveals that properties in Dubai are now priced 72.1% above the market trough of April 2009, underscoring a sustained growth trajectory.

Off-Plan Market Dominance

The off-plan sector continues to dominate the market, driven by robust new project launches and strong demand. April saw the introduction of nearly 10,000 new units, contributing to a record total of around 34,000 units from 120 projects in Q1 2024. This vigorous activity reflects developers' confidence in Dubai's market potential and investors' ongoing appetite for new developments.

Sector-Specific Insights

• Residential Transactions: Predominantly concentrated in apartments, townhouses, and villas, residential transactions made up 91.8% of total sales, with significant activity in off-plan properties.
• Mortgage Activity: While overall mortgage transactions declined by 23.8%, new purchase money mortgages remain robust, indicating continued investor confidence in acquiring new properties.
• Price Tiers and Developments: The AED 1.5m-2m price tier showed the fastest growth, largely due to high-end new developments like Address Residences Zabeel and Sobha One. The mid-tier market segment (AED 1m-3m) remains the largest, reflecting a broad investor base.

Detailed Community and Development Insights

• Price Appreciation by Community: New developments in communities like Dubai Sports City and International City are seeing off-plan price premiums of up to 80%, indicating a significant shift towards newer, more premium offerings compared to existing stock.
• Development Hotspots: Notable activity was observed in Meydan Horizon, Jumeriah Garden City, and Motor City among others, with developers focusing on a mix of residential and mixed-use projects that cater to a diverse range of investor and resident demographics.

Market Outlook

Looking forward, the divergence between the ready property market and the off-plan market is expected to persist. While the ready property market shows signs of plateauing in some segments, the off-plan market is likely to maintain its strong performance, supported by continuous project launches and investor interest. However, ongoing monitoring of absorption rates will be crucial to avoid potential oversupply issues.

Conclusion

Dubai's property market stands as a testament to the emirate's enduring appeal and robust economic fundamentals. With a strategic focus on growth and sustainability, the market is well-positioned to continue its trajectory of appreciation and high transaction volumes, offering lucrative opportunities for developers and investors alike.

For detailed insights and further information, stakeholders are encouraged to engage directly with Property Monitor's comprehensive reports and market analyses.