Decoding the Latest Market Reports: What They Mean for Home Buyers and Sellers

The property market in Dubai, much like any other market, experiences cycles of growth and decline. Currently, the market is witnessing a steady increase in demand, driven by factors such as population growth, tourism, and infrastructure development. Prices are currently seeing a slow yet steady increase. The current average price of properties in Dubai is AED 1,294 per square foot, which is a 0.83% rise from January. The value of properties is expected to go up by 5% to 8% compared to last year. Let's decode the data from the latest market reports and discover the opportunities for buyers and sellers in the real estate market.

Source: Property Monitor

A Record High Sales Volumes

Source: Property Monitor

Interestingly, prices aren't increasing much, but sales volumes are escalating. February witnessed a record-breaking count of sales transactions. A total of 11,913 properties were sold, showing a 30.4% year-on-year rise. Most of these sales, about 92.1%, i.e. 10,966 properties, were for homes like apartments, townhouses, and villas. The rest were commercial properties like hotel apartments, office spaces, and land, making up 7.9% of the total sales.

Source: Property Monitor

The reason for the hike in sales volume is mainly due to the high demand for off-plan properties, especially apartments. The sales volume for villas and townhouses is low, not because people don't want them but because there aren't as many for sale in the market. Emaar has announced two new communities, The Heights Country Club and Grand Club Resort. These projects are going to be in the southwest areas of Dubai along the E611 road. They will bring in more villas and townhouses, which the market needs, and will help Dubai grow even more.

Off-plan Properties are the Preferred Choice

Source: Property Monitor

Off-plan properties have carved out a significant market share, accounting for nearly 57% of all sales. In January, there were 6,384 off-plan property transactions, a slight decrease of 0.5% compared to the previous month. This type of transaction now makes up 53.8% of all property sales, a small drop of 1.6% from before. On the other hand, sales of properties with Title Deeds increased by 6.3%, making up 46.4% of all transactions.

Sometimes, villa and townhouse sales are counted differently in the data. Some are listed as completed properties with Title Deeds instead of being counted as off-plan sales while under construction. When we adjust for this, off-plan transactions make up an even bigger part of the market, accounting for 59.8% of all transactions.

A Slight Downtrend in Mortgage Activity

Mortgage transactions have seen a slight dip, but new purchases are gaining momentum. In February, mortgage transactions decreased by approximately 5%, resulting in 2,868 loans. Nearly half of these loans, 46.1%, were for buying new properties, with an average loan amount of AED 1.77 million. The rest were for refinancing existing loans or releasing property equity, but their share decreased slightly to 37.6%. The remaining 16.3% was for bulk loans from developers and big investors for multiple units. These bulk loans were spread across various projects, like Domus Indigo in Dubai Production City and The Sustainable City, The Neighborhood and Ashjar in Al Barari. The mortgage activity is expected to stay around the same levels for now, but if interest rates drop, we might see a surge in mortgage activity, especially for refinancing existing loans.

Recommendations for Buyers

Prices are slowly going up, but not too quickly, so you might have some time to find a good deal. Right now, residential properties, especially apartments, are in high demand. If you are interested in buying, you should act fast before prices increase. Jumeirah Village Circle, Mohammad Bin Rashid City, Mudon, and Dubai Maritime City are experiencing the highest sales transactions. Off-plan properties are selling like hotcakes, so keep that in mind when looking around. 

Source: Property Monitor
 

If your goal is to buy a property for rental income, analyse the rental market in the area. The graph above shows that Deira, Dubai Silicon Oasis, Discovery Gardens, and Jumeirah Lake Towers are ideal communities in which to buy a property for rental income.

Contact us now to explore available properties for sale.

Recommendations for Sellers

Sellers should know that even though prices aren't increasing much, there is still a high demand for properties. If you want to sell your home, you must make sure it stands out from the rest. So, fix up any repairs, make it look nice and inviting, and price it competitively. Also, selling off-plan properties seems popular, so it might be worth considering if you have that option.
 

List your property with Betterhomes and market it for a quick sale.

Even though many new projects are being launched, we are not seeing concerns about too many properties being available. People are quickly buying up these new properties to live in and rent out. We feel positive about property values continuing to grow steadily without any major risk of a sudden crash in the market. However, at some point, the market might reach a stage where there's too much supply compared to demand, which could lead to prices dropping. But this is a normal part of how real estate markets work.