In a surprising turn of events, the Dubai real estate market has displayed resilience and strength, contradicting recent concerns over a purported decline in off-plan transactions. According to a comprehensive study by Realiste, a leading AI-based proptech, the market witnessed a robust 46 per cent surge in transactions and an impressive 37 per cent increase in the total value of registered sales during the months of September and October this year, as compared to 2022.
Contrary to recent reports citing Dubai Land Department (DLD) data, which indicated a significant 65 per cent drop in off-plan registered sales from September to October, Realiste’s research sheds light on key factors influencing this perceived downturn. The study attributes the decline to a temporary lag in the registration process, averaging 2-3 months between developer deals and DLD registration. Realiste’s AI study draws insights from data directly sourced from Dubai’s developers through integrated CRM systems, offering a more nuanced perspective on market conditions.
The report emphasises that the apparent market collapse is a result of temporal inconsistencies and a deliberate reduction in new project launches during the summer months, rather than a signal of an impending market downfall. Realiste notes that the recorded decline in off-plan sales is, in reality, reflective of transactions completed on average in June, July, and August.
During the summer season, there was a notable reduction in project launches, with developers introducing three times less supply volume compared to the same period in 2022. This scarcity has not only accelerated project sell-outs due to high demand but has also reshaped market dynamics, contributing to the perceived dip in off-plan sales, the report states.
Despite the temporary dip, the study reaffirms Dubai’s real estate market as resilient and dynamic, with a steady increase in bookings. The volume of booked off-plan units showed an upward trend from July to September, indicating sustained interest in Dubai as a real estate destination.
The report also highlights the unique market condition in Dubai, where the primary real estate market surpasses the secondary market in size, challenging traditional market compositions. This anomaly is attributed to the strategic advantages of acquiring new buildings during rapid growth, offering favourable developer instalments and higher investment returns.
In conclusion, the Dubai real estate market continues to exhibit healthy growth, with a 46 per cent increase in transactions and a 37 per cent rise in the total value of registered sales during September and October this year, compared to 2022. Realiste emphasises the need to consider factors beyond transaction data alone to assess the relative health of a real estate market, underscoring the importance of analysing the number of bookings for a holistic view. Despite concerns triggered by recent DLD data, the study asserts that Dubai’s real estate market remains far from an imminent downturn.
Original article reference: Arabian Business.