The residential real estate market of Dubai is all set to witness a sea change in Q2 2024, with new constructions to be launched on a large scale. These developments will then reshape market dynamics across key areas, having an impact on the sale and rental prices
Dynamics of Supply: Residential Units See Surge
According to the latest report by Real Trust UAE, Dubai currently has over 297,000 residential units under construction, accounting for 55% of its current residential property supply. This influx is likely to add around 30,000 units in Jumeirah Village Circle, 20,000 units in Business Bay, and 14,000 units in Dubai South, among other developments.
Impact on Popular Residential Areas
Jumeirah Village Circle (JVC)-
JVC, known for its rocketing prices due to high demand against low inventory, will see a radical increase with 30,000 new units, in addition to its current stock it accounts for 80%. This oversupply is expected to bring more balance to the market dynamics in the area.
Business Bay-
Business Bay will add a further 20,000 residential units to the market-straight into a high demand, rising price environment. This could have the effect of easing some of the upward pressure in the area.
Dubai South-
With the impetus of major infrastructure projects, including a new airport, the emerging Dubai South district is poised to deliver 14,000 news homes. This will altogether transform the residential landscape of this area.
Market Dynamics and Trends
Price Adjustments and Increased Days on Market: The report underlines a couple of trends that suggest the tides in the market dynamics have changed: a decline in the median residential listing price by 5% month-over-month since September last year, a signal of transition into a buyer’s market, and an increase in the lag time on the market for sale listings—a more than threefold increase from 30 days last year to a pace exceeding 90 days, indicative of less-quick sales.
Segment Performance: The residential sales transaction volume across secondary/ready properties moderated by 2.9 percent Q-o-Q, but median sales prices increased by 5 percent, touching AED1.4 million.
Off-plan Market Momentum: The off-plan market continues to register good activity levels, with an additional 78,361 units launched in 2024. Off-plan sales transactions surged 18 percent Q-o-Q and a robust 64 percent Y-o-Y in Q2, though the median sales prices registered a marginal drop.
Developer Strategies and Market Response
Real estate developers are able to offer even more competitive products in order to keep up with the changing market conditions through-
Incentives and Discounts: More incentives, discounts, and post-handover payment plans are being offered in order to make the product more attractive.
Post-Handover Payment Plans: 34% of the newly launched projects in 2024 have post-handover payment plans ranging from 12 to 120 months, covering the majority of the preferences of buyers.
Future Outlook
With Dubai’s ever-growing population—25,776 new residents in Q1 2024—the real estate market will continue changing. How new supply impacts market dynamics, together with ongoing infrastructure initiatives, will be major factors influencing the future direction of residential property prices and trends in rentals over the medium term.
The Q2 2024 Dubai Residential Real Estate Market Report highlights the changing market dynamics due to new residential supply. Although there will have been great gains on the housing stock in most of the areas, the change in buyer preferences trend gradually transforms Dubai’s real estate market into a dynamic landscape for all stakeholders as supply-demand dynamics keep changing and strategies that developers continue to adopt evolve.
