According to a recent report from consultancy ValuStrat, as the real estate market surges, Dubai is expected to record the handover of 38,174 new homes this year.
According to the consultancy, as of the first half of this year, the total estimated completions amounted to 6,939 apartments and 2,145 villas, which is equal to 20% of the preliminary estimates for the entire year 2024.
According to the report, significant villa completions during the second quarter included Silver Springs 3 in Damac Hills with 258 villas and Murroj Al Furjan West with 161 units. Notable apartment completions during the same period included Creek Views 1 and 2, with 634 and 587 apartments.
According to ValuStrat’s estimation, about 91,718 apartments and 28,385 villas are presently under construction in Dubai, with completion scheduled for 2028.
The findings showed that of these projects, 10% are situated in Jumeirah Village Circle, 10% are in Business Bay, and 5% are at Jumeirah Lakes Towers.
“Dubai’s real estate market continues to thrive with strong demand. The upwards trend in valuations and rents across various segments shows that the market cycle is in its upswing stage,” said Haider Tuaima, director and head of real estate research at ValuStrat.
“As the market stabilises and matures, monitoring these trends and adjusting strategies accordingly will be crucial to maximising investment returns.”
The government’s initiatives, like extending the 10-year golden visa program and granting residency permits to remote workers and retirees, have contributed to the recent boom in the UAE real estate market.
The property market is being supported by the UAE’s economy’s overall growth as a result of its diversification efforts.
According to a report released earlier this year by Knight Frank, sales of properties priced at $10 million or more nearly doubled to $7.6 billion last year, setting a record for Dubai’s luxury prime market, outperforming both London and New York.
The real estate market in Dubai has been greatly affected by the increase in wealth creation worldwide. Dubai has become a popular destination for wealthy people looking to diversify and secure their assets in the face of geopolitical volatility, according to real estate broker Betterhomes.
According to the ValuStrat report, Dubai’s villa market remained strong, with capital values showing an annual growth of 33.4 percent and a marginally higher quarterly growth of 7.3 percent.
Palm Jumeirah, Jumeirah Islands, Dubai Hills Estate, and Emirates Hills were the top annual performers.
Apartment valuations also increased, rising 5.4% every quarter and 23.4% on an annual basis.
According to the research, the best annual performers were Dubailand Residence Complex, Town Square, Al Quoz Fourth, Palm Jumeirah, The Views, Discovery Gardens, and The Greens.
Notably, according to ValuStrat data, Palm Jumeirah became the first apartment location to surpass the 2014 price peaks for apartments in Dubai.
“The record rainfalls in April caused severe flooding in many areas of Dubai, but this did not significantly impact valuations in the subsequent months,” Mr Tuaima said.
“The prompt response from master developers and authorities effectively contained and controlled the damage in affected communities.”
The report found that in the second quarter, there were 7,921 mortgage transactions in the Dubai real estate market across all asset classes, as opposed to 13,834 cash transactions of ready properties.
Mortgage transactions accounted for Dh26 billion ($7.1 billion) of the total sales value, while cash transactions made up Dh35 billion.
According to ValuStrat estimates, the number of off-plan registration transactions increased by 61.4% annually and 19.1% quarterly, translating into investments worth Dh59.9 billion.
During the quarter, transactions in prime off-plan locations included projects in Meydan One, Business Bay, and Jumeirah Village Circle.
11,508 ready secondary home transactions were recorded in the second quarter, representing investments worth Dh29.3 billion. This represents a quarterly decline of 1.7% but an annual increase of 4.8%.
According to ValuStrat, 37 percent of all ready-to-move-in sales had a price tag of less than Dh1 million, up from 40.8% the previous year.
According to the consultancy, there were 55 sales of houses valued at more than Dh30 million, as opposed to 63 during the same time the previous year.
According to the report, Business Bay, Dubai Marina, and Jumeirah Village Circle were the most frequently traded locations for ready properties.
Dubai rents increase
According to ValuStrat’s estimate, Dubai’s residential rental values increased by 2.7% every quarter and 10.8% on an annual basis.
While average annual rent for villas increased by 1.1% every quarter and by 3.5% on an annual basis to Dh408,200, average annual rent for apartments increased by 16.9% on an annual basis and by 3.8% every quarter to Dh89,100.
“The average asking rents per annum for apartments were studios at Dh59,000, 1-bed at Dh86,000, 2-beds at Dh123,000, and 3-beds were Dh193,000,” the report said.
“The average annual rents for villas were 3-beds at Dh321,000, 4-beds at Dh401,000 and 5-beds at Dh503,000.”
According to the study, residential occupancy in Dubai was projected to be 87.7% in the first half of 2024.
