Market Insights: March 2024

30 new off-plan projects launched, resulting in 10,000 units added to the market

Mortgage activity saw a slight decline, yet purchase loans continued to increase

In March, Dubai's real estate market blew past all prior expectations and set new records. Property prices increased by 2.37%, reaching an all-time high of AED 1,325 per sq ft. This marks a significant 7.4% increase from their previous peak in September 2014, demonstrating the continued strength and growth of the market.

The month also recorded an impressive 113,664 sales, a 14.7% increase from February and the second-highest monthly sales volume on record. This surge in sales, however, was mainly driven by off-plan transactions, which secured an even higher market share of 63.7%. With the launch of 30 off-plan projects and over 10,000 units, the first quarter of 2024 alone saw 34,000 units across 120 projects.

Built properties are gaining traction, with upgrades in older apartments and increased demand for renovated villas and houses keeping the market highly active. This mixed demand between off-plan and built properties indicates a balanced market, demonstrating strong investor confidence.

March's real estate market price tiers have seen a nuanced recalibration across its price segments. Its fastest-growing group, the AED 3m-5m price tier, saw an increase of 2.6% and now holds 13.8% of the market. This is due to the development of many new high-apartments in Address Residences Zabeel and more budget-friendly apartments in villas at South Bay 4, averaging AED 2,709 and AED 814 per sq ft, respectively.

AED 2m-3m price tier's performance was also significant, but for different reasons. The segment experienced a 2.5% drop, holding a current market share of 15.9%. Adjacent AED 5m-10m and AED 10m+ price tiers, meanwhile, have collectively gained 1.7% of the market, representing 6.3% and 2.7%, respectively. This surge can be attributed to the off-plan sales in upper-mid-priced villas at Bay Villas on Dubai Islands and lower-mid villas at Farm Gardens 2 in The Valley.

Grouping the nine price tiers into three categories, mid-priced properties (AED 1-3 million) experienced a 6.9% market share drop, now holding 45% of the total market. Properties priced below AED 1 million saw a 2.6% increase, keeping a 32.2% market share. Lastly, the market share of high-end properties (AED 3 million and above) rose by 4.3%, representing 22.8% of the total market.

March's figures show that Dubai's property landscape is still a buyers' market. With property prices fully rebounding from their all-time low in 2019 and reaching a new high, the boom in the real estate market is undeniable. However, this growth is not uniform across all price tiers, as seen with Dubai’s AED 1-3 million property price tier seeing a 6.9% loss in market share.

With off-plan transactions soaring and residential renovations in full swing, developers now cater to a more diverse market. This is demonstrated in the AED 3m-5m and AED 5m-10m price tiers, where high-end and budget-friendly developments are emerging and gaining a significant market share, respectively.

Dubai's pipeline is filled with high-profile projects, and recent real estate annual appreciation rates have surpassed previous forecasts of 5-8%. As a result, investors and homebuyers are going in for the long haul, foreseeing continued growth in the market for years to come.

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