Residential demand in Dubai saw a significant boost in July, with more than 15,300 units worth AED40.5 billion ($11.03 billion) transacted across the city, according to Emirates NBD Research.
Strong Demand for Off-Plan Units
The demand for off-plan units has remained robust. July’s transactions reflect the ongoing trend observed since the beginning of the year, with 10,160 under-construction units sold in July, representing 66% of the demand.
One of the most popular areas for residential transactions has been the Jumeirah Village Circle (JVC). Close to 10% of the approximately 90,000 units sold across Dubai to date have been in JVC, a preferred location for both end-users and investors due to its relatively affordable ticket prices.
“Dubai has a lot of supply, it has an abundant supply. The constraint happens in certain segments of supply. If everybody starts developing luxury property, then of course, the supply for affordable property is less. If the demand is more in the luxury sector, then more properties are needed there. If the demand is coming from first-time homebuyers and they are looking at a budget of say between AED800,000 to AED1.5million, which is also a very good budget for a first time homebuyer, then more projects for this type of buyer is needed and they may want to be close to a metro with good infrastructure around them, such as schools and hospitals,” says Mona Jalota, founder & Managing Director of Krypton Global Real Estate.
Marginal Price Increase
Average prices across apartments and villas in Dubai have increased by 2% month-on-month. With this marginal price rise in July, annual price points across the city are now 19% higher for apartments and 24% higher for villa developments and other residential properties.
Unit Handovers and Future Completions
To date, nearly 14,100 units have been handed over across the city this year. An additional 38,700 units are slated for completion by the end of the year. Over the next 12 months, a significant number of unit handovers is expected, with Business Bay having close to 4,090 units scheduled for completion throughout 2024. This is followed by JVC with 3,900 units, Meydan and Damac Lagoons each with 3,800 units, and Al Furjan with 3,070 units.
The steady increase in residential demand and the continued development of new units highlight Dubai’s growing real estate market, making it an attractive destination for both local and international investors.
Mortgage Prices Expected To Fall, Say Experts
“As per the current market scenario, mortgage rates in Dubai are predicted to fall by up to 1% this year. Last year the mortgage rates were very high, this year it has dropped. Because of this, there is a rise in demand for properties, and while the demand is high the prices from the seller’s side are quite high too,” says Shruti Krishnan, Senior Sales Manager, White Window, UAE.
An increase in mortgage leads is generally a strong indicator of rising consumer confidence. Rising mortgage leads often coincide with a bullish real estate market, signaling consumer confidence in residential property values and potential for appreciation.
“The affordability of mortgage rates affects the homeowners trend in two distinct ways. One is if there is a healthy economy, stable political economy and the mortgage rates are low, then individuals could be better incentivised to purchase homes rather than rent them. Conversely, if the mortgage rates are high, the individuals may prefer to rent properties than become homeowners. So one has to carefully monitor these dynamics of the market,” adds Jalota.
Earlier this year, reports suggested a 36% increase in property sales which in part is due to the “popularity” of the city said Jalota. Dubai was also named TikTok’s most popular city last week, research from Bounce said.
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