- More than 40,000 units expected to be handed over this year
Dubai’s robust housing supply to benefit buyers, tenants
Dubai’s buoyant residential market is poised to witness the handing over of more than 40,000 units in 2024 on the back of close to 100,000 new units launched in 2023.
The housing sector, which posted the largest annual price increase of 16.4 per cent in over a decade last year, will continue to add to the robust pipeline of supply that will be delivered in the years ahead, according to Property Monitor, a leading real estate technology and market intelligence provider.
The increasing supply of units over the next three to five years will see the supply-demand relationship gradually moving back in favour of buyers and tenants, putting downward pressure on pricing as new projects get completed and more units become available for occupancy, Property Monitor, said in a report.
“As both occupiable and future supply increases, population growth will be one of the key measures to watch. Dubai experienced slightly less than 3.0 per cent annual growth in population over 2023, with a relatively stable monthly growth trend of 0.25 per cent. To absorb upcoming supply this year and in the coming years, this rate needs to increase to avoid oversupply issues and progression into the downwards phases of the market cycle,” said the report.
According to the Property Monitor Dynamic Price Index (DPI), Dubai property prices currently stand at Dh1,281 per square foot, a little shy of 4.0 per cent above the previous all-time high. Average Dubai property prices increased an additional 0.8 per cent in December to end the year up.
In the 38 months since bottoming out in October 2020, prices have gone on to increase 45.7 per cent, averaging 1.37 per cent per month in 2023, 0.90 per cent in 2022, and 1.33 per cent per month in 2021.
“The recent year-on-year uplift in the rate of price appreciation has largely been driven by the significant and sustained volume of new project launches—which for the majority of the year were skewed towards properties priced in the luxury to ultra-luxury price tiers. Price growth for completed properties remains positive, however relatively subdued contrasted to price per square foot rates of new projects within the same communities,” the report noted.
In December, the total volume of sales transactions decreased 9.9% month-on-month, falling to a total of 11,016 sales, yet still recorded as the highest volume ever for the month of December. Residential transactions, encompassing apartments, townhouses, and villas, accounted for the majority of sales at 91 per cent (10,026 transactions).
The highest transacted commercial property types were hotel apartments (2.9 per cent), and office spaces (2.6 per cent), and land sales (2.3 per cent). A total of 133,673 sales transactions were registered in 2023 (90.5 per cent of which were residential), a 38.4 per cent increase over last year and eclipses the long-standing record set in 2009 by more than 35,000 sales. A total of 5,396 off-plan Oqood transactions were registered in December, marking an 8.3 per cent month-on-month decrease in volume. However, there was a 0.8 per cent increase in market share.
According to the latest findings of Bayut, a leading property portal in the UAE, the upward trajectory of property prices in Dubai persists, driven by a record influx of local and international investors attracted to the promising returns on investment,
This “unprecedented boom,” while establishing a favourable setting for sellers and landlords in 2024, aligns with the heightened demand fuelled by the influx of investors and residents, resulting in unprecedented growth in the real estate market, the portal forecasts, based on the search trends observed on Bayut.
The portal’s data indicates a notable uptick in sales prices for apartments and villas across prime neighbourhoods in Dubai, registering surges of between 4.0 per cent and 21 per cent in 2023.
Market pundits said the repeatedly succeeding characteristic of Dubai’s real estate market is due to increased investor appetite, a rising inflow of professionals, population increase, and the city’s growing reputation as a haven for the wealthy. Net migration exceeding the rate of new home handovers is a key factor putting upward pressure on rental prices.
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