Off-Plan Purchases Fuel Growth in Dubai’s Residential Market

In May, Dubai’s real estate market saw an unprecedented surge in demand for off-plan homes. The emirate recorded a 41.6% month-on-month increase in new contract registrations, totaling over 10,000 transactions. This accounted for 69.4% of all residential sales, according to the latest ValuStrat report.

The report highlighted a 76.3% year-on-year increase in off-plan registrations for residential properties, especially, communities like Jumeirah Village Circle and Meydan One were pivotal in driving this demand.

In particular, Discovery Gardens and Dubai Hills Estate set new records in May for the highest number of off-plan homes traded within a single month.

Growth in Ready Home Transactions

The market for ready homes also experienced growth. Transactions increased by 8.1% year-on-year and 45.9% since April. The majority of these sales occurred in Jumeirah Village Circle (8.3%), Business Bay (6.6%), Dubai Marina (5.9%), Downtown Dubai (5.3%), and Jumeirah Lake Towers (3.9%).

High-value transactions were also striking, with 16 ready properties sold for over AED 30 million. These premium homes were located in Palm Jumeirah, Dubai Marina, Jumeirah Bay Island, Emirates Hills, and District One.

Capital Values and Market Resilience

Despite the heavy rainfall and subsequent flooding in April, demand for residential properties remained strong, averting any significant impact on home valuations.

Villa capital values continued to rise steadily in May. Palm Jumeirah villas saw an impressive annual increase of 41.7% in capital value. Other communities with notable gains included Jumeirah Islands (41.1%), Dubai Hills Estate (37.5%), Emirates Hills (32.5%), and The Lakes (32.1%).

According to ValuStrat, most established villa communities in Dubai have now surpassed their previous capital value peaks from 2014. Remarkably, Palm Jumeirah also became the first apartment area to achieve this milestone.

Apartment prices increased by 1.8%, slightly higher than April’s 1.6% rise, marking a record annual growth of 22.4%. Areas with the highest apartment capital gains included Discovery Gardens (34%), The Greens (32.6%), Palm Jumeirah (30.9%), Al Quoz Fourth (29.1%), and The Views (28.1%).

Original article reference: Zawya.

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