The Dubai real estate market has witnessed a remarkable surge, with over 80% of newly launched property units sold out since 2022, indicating a sustained high demand for off-plan projects in the emirate.
Since 2022, both local and international developers have launched projects worth hundreds of billions of dirhams in Dubai. According to data from the Dubai Land Department, nearly 214 projects have been initiated, with 148 of them currently active.
High Absorption Rates for New Launches
Taimur Khan, Head of Research for the Middle East at CBRE, highlighted the robust demand for new properties.
"Despite concerns about an oversupply affecting prices, our analysis shows that at least 70% of units launched since 2022 have been sold. This figure is even higher, above 80%, in Dubai’s core and established residential areas,"
Khan noted.
The post-pandemic period has seen developers rapidly selling their inventory, with some projects selling out within a day or even a few hours.
Strong Demand from Owner-Occupiers
Dubai's residential market continues to experience strong demand, primarily driven by end-users and residents looking to purchase their own properties. Many residents are buying to avoid the escalating rental market, while high-net-worth individuals are increasingly relocating to Dubai.
In May 2024, Dubai recorded its highest monthly transaction volume to date, with 15,766 transactions, marking a 44.2% increase compared to the previous year, according to CBRE. Property prices have also surpassed previous peaks from 2014, reaching Dh1,360 per square foot in May 2024, which is 10.25% higher than the previous all-time high in September 2014.
Khan added,
"Anecdotally, a significant portion of the demand in the off-plan market comes from owner-occupiers. Thus, while the increase in supply might ease the rental market, it is unlikely to put downward pressure on sales prices."
Shift in Market Dynamics
CBRE's monthly report indicates a shift in market dynamics since 2019. Previously, sales were concentrated in Dubai’s core and prime residential areas, often near Central Business Districts or leisure destinations. However, recent data shows buyers are now moving away from these established areas.
Tatiana El Bazi, Senior Research Analyst at CBRE, explained,
"This shift is due to the lack of available and upcoming supply in these established locations and the significantly higher costs associated with acquiring real estate in these neighborhoods."
As Dubai continues to expand, the real estate market is adapting to new demands and shifting trends, maintaining its status as a global property hotspot.
News Source: Khaleej Times
