According to a new report by Real Trust UAE, over 290,000 residential units are currently under construction in Dubai. This construction boom represents 55% of the existing residential property supply and is set to significantly influence market dynamics in the coming years. The influx of new properties will provide a variety of options for buyers and renters, potentially stabilizing prices and offering more affordable housing solutions.
Key Areas Under Transformation:
Several key areas in Dubai are poised for significant growth and transformation due to the addition of new residential units:
- Jumeirah Village Circle (JVC): This area is set to receive approximately 30,000 new residential units, which is equivalent to 80% of its current housing stock. JVC has seen prices double in recent years due to high demand and limited inventory. The influx of new properties is expected to balance the market, making it more accessible for buyers and renters.
- Business Bay: Known for its high demand and escalating prices, Business Bay will see an addition of around 20,000 new residential units. This development is likely to attract investors and residents looking for properties in a prime location with excellent amenities.
- Dubai South: An emerging hotspot bolstered by the announcement of a new airport, Dubai South is slated for 14,000 new homes. This area is becoming increasingly attractive to both investors and residents due to its strategic location and potential for growth.
Market Trends and Insights:
The latest Q2 2024 Dubai Residential Real Estate Market Report by Real Trust UAE highlights several key indicators of a shifting market landscape:
- Price Adjustments: Since September last year, the median residential listing price has been declining month-on-month by an average of 5%, signaling a transition from a seller’s market to a buyer’s market. This trend indicates that buyers now have more negotiating power and opportunities to find better deals.
- Sales Trends: The average days on market for a sale listing increased from 30 days to over 90 days, reflecting a slowdown in the market. The secondary or ready market shows a 2.9% decline quarter-on-quarter in residential sales transaction volume, marking the second consecutive quarter of decline. Despite this, the median sales price for residential secondary transactions in Q2 was AED 1.4 million, showing a 5% increase from Q1.
Off-Plan Market Still Robust:
The off-plan market in Dubai remains active and resilient:
- New Launches: A total of 78,361 new units have been launched in 2024 so far. Off-plan sales transactions in Q2 increased by 18% quarter-on-quarter and 64% year-on-year, indicating strong interest and confidence in future developments.
- Pricing: The median off-plan sales price in Q2 was AED 1.54 million, representing a marginal 0.6% decline from Q1 and the second consecutive quarter decline. Despite the slight dip, the off-plan market continues to attract buyers looking for new and innovative properties.
Developer Adaptations:
Real estate developers are adapting to the changing market conditions by offering more competitive products through incentives, discounts, and extended post-handover payment plans. Of the newly launched projects this year, 34% feature post-handover payment plans, ranging from 12 to 120 months. These flexible payment options make it easier for buyers to invest in new properties and contribute to the overall stability of the market.
Population Growth Impact:
Dubai's population continues to grow, with 25,776 new residents in Q1 2024, bringing the total to 3,680,785. This population increase is driving demand for residential properties and contributing to the dynamic evolution of the real estate market. As more people move to Dubai, the need for housing, infrastructure, and amenities will continue to rise, further fueling the growth of the real estate sector.
Dubai's real estate market is undergoing significant changes with the introduction of over 290,000 new residential units. Key areas like Jumeirah Village Circle, Business Bay, and Dubai South are set to benefit from these developments, potentially stabilizing prices and offering more options for buyers and renters. Market trends indicate a shift towards a buyer’s market, with declining prices and increased days on market. However, the off-plan market remains robust, with strong interest and numerous new launches.
