The demand for ready properties remains strong despite the off-plan segment leading the Dubai real estate market rally. Reasonably priced units are selling within a month of going up for sale.
Demand from residents and high-net-worth individuals is driving the ready property market, which is also experiencing a supply shortage as end users move into the city due to rising rental rates.
“Dubai is getting an additional 8,000 plus residents per month, the demand outweighs supply in the majority of projects being launched and sold out and ready properties correctly priced are selling with a maximum of four weeks of being on the market,” Provident Estate said.
“Property demand in 2024 so far was high for ready properties, but due to the lack of stock, we have seen the majority of growth coming from the off-plan segment. There has been a 13.2 per cent increase in ready property transactions yearly,” said Engel & Völkers Middle East.
According to the report, the first half of 2024 saw a 14.57 percent increase in ready property prices over the same period the previous year.
Growing end-users
Dubai’s population increased from 3.66 million at the start of 2024 to 3.754 million on August 1, putting the city on track to meet its population growth target for 2040. By 2040, the population will have grown to slightly over 5.5 million if the current steady rate of increase continues.
Industry insiders speculate that the majority of purchasers of ready-to-move-in real estate are either locals or investors seeking to use the properties for personal use despite the high rental prices, whether they are end users or millionaires moving to Dubai.
Henley Partners and New World Wealth’s World’s Wealthiest Cities Report 2024 states that 72,500 people in Dubai have liquid investment wealth, or assets that are easily convertible into cash, valued at $1 million or more. This number rose by 78 between 2013 and 2023.
“The Dubai real estate market has seen continuous growth with record sales across all sectors. Notably, the end-user market which increased from 2020 due to the stability of the Emirate, has seen villa/townhouse prices increase due to low supply. Luxury properties in Dubai continue to attract high net worth individuals and investors looking for premium real estate opportunities,” Provident Estate said.
The average rental yield in Dubai’s real estate market is currently between 6 and 8 percent, while it is between 2-3 percent in London and Hong Kong and 3–4% in New York. While Dubai experienced an 18% increase in property prices in just one year during 2022–2023, the average property price appreciation in the three cities mentioned above was between 10 and 20% over five years.
