Dubai Off-Plan Market Thrives: Investments Drive Record Q1 Sales

According to a report by Land Sterling, a real estate consultancy, Dubai’s real estate market thrived in the first quarter of 2024, recording a significant sales volume and value increase. The “Q1 2024 Dubai Property Watch” report highlights the rise in residential unit supply and sales transactions, cementing Dubai’s position as a top real estate investment destination.

The report revealed vigorous activity in Dubai’s residential sector. The first quarter of 2024 witnessed the relocation of about 6,500 residential units, with 75 percent of apartments and 25 percent dominated by villas. Maidan One, Jumeirah Village Circle (JVC), and Al Farjan had the highest number of finishes in Mohammed bin Rashid (MBR) City.

Land Sterling plans to supply about 64,400 residential units by the end of the year, assuming project timelines are met. However, their analysis shows that only half of these units will be returned to buyers in 2024. MBR City, JVC, DAMAC Lagoons , and Business Bay are expected to deliver most future deliveries, with apartments numbering 70% and villas numbering 30. %

The report revealed an unprecedented increase in sales transactions during Q1 2024. More than 35,300 transactions worth AED 88.8 billion (USD 24 billion) were recorded, reflecting year-on-year increases of 20.5% in volume and 24.1% in value. In particular, off-plan sales were robust, accounting for 63% of the total transactions. This trend can be attributed to developers’ attractive and flexible payment plans, including 1% monthly installments and buyback guarantees.

The report also noted a significant increase in average fares. Compared to last year’s period, Villa fares rose 14 percent, while apartment rents saw a sharp rise of 22 percent. Dubai’s Real Estate Regulatory Authority’s (RERA) rental calculator recalibration will positively impact rental rates, reflecting market prices. Additionally, some renters are switching to homeowners to avoid potential migration or renewal negotiations between rising prices and interest rates.

Dubai’s economic base remains strong, with a GDP growth of 3.3 percent in the first nine months of 2023. The Consumer Price Index (CPI) also rose 3.3 percent in March 2024, primarily driven by the insurance and financial services sectors.

Apartment and villa values increased by 20% and 19%, respectively, with a positive trend. Jumeirah Village Circle saw apartment and villa rents increase by 21% and 20%, respectively, reflecting strong demand in Dubai’s residential property market.

Land Sterling’s report identified Jumeirah Village Circle (JVC), Business Bay, Dubai Maritime City, Downtown Dubai, and Dubai Hills Estate as the top-performing areas by transaction volume. Business Bay, Palm Jumeirah , Downtown Dubai, Dubai Hills Estate, and JVC led the market when considering the transaction price.