More than 80% of new property units launched in Dubai since 2022 have sold out, demonstrating the Emirate’s consistently high demand for off-plan projects.
Since 2022, Dubai has seen hundreds of billions of dirhams in real estate projects launched by both local and foreign developers. According to Dubai Land Department data, nearly 214 projects have been launched, with 148 of them currently active.
“Much has been said about the influx of new launches and the potential dampening impact that this may have on prices, where supply may again start to outweigh demand. However, the absorption of new stock sits at markedly high levels, where our headline analysis shows at least 70 per cent of units which were launched since 2022, have been sold to date,” said Taimur Khan, head of research for Middle East at CBRE.
“Due to lags in data, we anticipated that this number would be materially higher. More so, within Dubai’s core and established residential areas, this figure is, on average, well above 80 per cent,” Khan added.
Following the pandemic, many developers sold their entire inventory in a relatively short period. Some of them sold out their projects in a day, while others sold in a matter of hours.
Majority are owners-occupiers
Dubai’s residential market continues to see exceptionally high levels of demand, driven by end-users and residents looking to buy their own homes. Most residents choose to buy to avoid the hot rental market and the influx of high-net-worth individuals to the emirate.
The total volume of transactions in May 2024 was 15,766, the highest monthly figure on record, representing a 44.2 percent increase over the previous year, according to CBRE.
Similarly, prices have surpassed the previous highs seen in 2014.
According to Property Monitor, prices will be Dh1,360 per square foot in May 2024, 10.25 percent higher than the previous all-time high and market peak set in September 2014.
“Anecdotally, we are seeing that a considerable portion of this demand in the off-plan market is originating from owner-occupiers, therefore, in the longer term, we expect that the increase in supply will provide some relief to the rental market, but for sales prices, it is unlikely to create downward pressure,” Khan added.
According to real estate consultancy CBRE’s monthly report, there has been a discernible shift in market dynamics since 2019, with the majority of sales transactions previously concentrated in Dubai’s core and prime residential hubs, which were historically located around Dubai’s various Central Business Districts or leisure destinations.
According to Tatiana El Bazi, senior research analyst at CBRE, recent data indicate that buyers are moving away from the city’s core and prime residential areas.
“This is owing to the prevailing market backdrop, vis-à-vis the lack of available and upcoming supply in these established locations, and more and more due to the now significantly higher cost associated with acquiring real estate within the aforementioned neighbourhoods,” she added.
