Real Estate by the Numbers: Understanding Market Stats and What They Mean for You

Despite challenging global economic conditions, Dubai's real estate market has proven to be a resilient hub for international investors. As we progress into 2024, the market presents opportunities and challenges ahead, and it is crucial to understand the market statistics before making decisions. The market kicked off 2024 on a high note with record sales and new project launches. In this blog, we will use numbers to gain a comprehensive understanding of the Dubai real estate market.

The Slowdown in Price Appreciation

Source: Property Monitor

Contrary to the strong annual price growth of 16.4% in 2023, the start of 2024 witnessed a rather unimpressive 0.2% monthly increase in average property prices. The current average price of properties is AED 1,284 per square foot, a modest 4% increase from the peak experienced in September 2014.

We anticipate that the real estate market will continue upward, though at a slower pace. The forecast for 2024 predicts an annual price appreciation of 5-8%, which is quite different from the big jumps in prices we saw in 2023.

Sales Volume Hits Record High

Source: Property Monitor
 

The beginning of 2024 observed remarkable sales transaction volumes totalling 11,615 sales, which marked a 5.4% month-on-month increase. Residential properties, including apartments, townhouses, and villas, constituted 91.7% of these transactions. The luxury property market is booming as we witnessed the sales of properties priced over AED 36.7 million. The leading developer in this category was Omniyat, accounting for over 26% of the sales. This surge is primarily due to the addition of 6,413 off-plan Oqood transactions, an 18.8% month-on-month increase. Meanwhile, Title Deed sale volumes are witnessing a 7.4% decrease.

Off-Plan Launches

A major aspect of Dubai's real estate market is its off-plan launches. In January 2024, more than 11,500 new off-plan units were introduced to the market. When completed, these units will increase the total number of residential properties by almost 13%. This addition indicates an aggregate gross sales value of approximately AED 31.1 billion.
 

Source: Property Monitor

Oqood transactions are used to track off-plan property sales, but many villa and townhouse sales are recorded with Title Deeds and listed as completed properties in Dubai Land Department data, thereby inflating their market share. After making this adjustment, we found that off-plan transactions comprise most of the market, with a 58.3% share.

Average Property Price

Source: Property Monitor

The average price for properties in Dubai is AED 2,578,095. However, homes are fairly spacious at this average price. On average, they have about 1,376 square feet of indoor space and a plot size of around 3,860 square feet.

The market statistics indicate high average prices, suggesting sellers could fetch good property returns. The average built-up area and plot size are relatively large, which could make properties more attractive to potential buyers. The market shows strong sales transaction volumes, so currently, there is a high demand for properties. Sellers have a good chance of finding interested buyers quickly.

Rental Trends

Source: Property Monitor

The rental market in Dubai is also active. The first two months of 2024 witnessed almost 81,000 transactions and expected yearly income of over AED 6.5 billion. The average yearly rent is around AED 75,000, with properties averaging 1,221 square feet in size and an average plot size of 27,754 square feet. This trend suggests tenants are paying higher for their rental properties, possibly due to larger residences like villas. These figures can vary based on location, property type, and market demand.
 

Dubai's real estate market benefits from local and international demand. The population grew by about 3% last year, with a consistent monthly growth rate of 0.25%. Factors such as population growth, economic stability, and lifestyle attractions contribute to property demand. Understanding the demand drivers can help identify areas and property types with potential for growth and higher rental yields.

Mortgages

There has been a 16.6% increase in mortgage transaction volumes, driven by a 32.7% month-on-month increase in apartment borrowing. Loans for refinancing and equity release also increased their market share by 1.6% to 37.9%.

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Signals for Future Investment

District 11 in MBR City, Dubai South, The Oasis, and The Valley will have more villas and townhouses built in 2024. New apartment projects are coming to communities like Motor City, Majan, Liwan, Jumeirah Garden City, and Dubai Land Residence Complex. New neighbourhoods are also planned for the southwest areas of Dubai, where the Arabian Canal was supposed to be built. Areas like Al Selal,  Al Yalayis 5, and DIP 2, located along Emirates Road (E611), are expected to grow and expand more in Dubai.

Conclusion

Dubai's property market is gearing up for another exciting year. Despite a slowdown in price appreciation, the record-breaking sales volumes and the increasing dominance of off-plan transactions indicate a promising market. The rise of off-plan properties results from attractive payment plans and potential capital appreciation. The demand for sustainable and eco-friendly properties is also rising as more buyers prioritise environmentally conscious living. Considering all these factors, Dubai's property market presents promising opportunities for buyers and sellers in the foreseeable future.