Surge in Apartment Demand in Dubai Signals Market Shift

The demand for apartments in Dubai is experiencing a rise as more professionals move to the emirate seeking better opportunities. This trend marks a shift from the pandemic era, when the sale of villas and townhouses surged due to the desire for larger spaces amid travel and outdoor activity restrictions.

The Khaleej Times previously reported that Dubai’s apartment demand has been outstripping supply due to consistent population growth. In 2023, Dubai’s population increased by nearly 100,000, while approximately 50,000 residential units were added to the market. In the first quarter of 2024, 25,700 new residents arrived, compared with only 6,500 new units available.

Recent data shows a shift in property preferences. In April, 58% of buyers were interested in apartments, compared to 42% for villas and townhouses. Similarly, 79% of tenants sought apartments, while only 21% looked for villas or townhouses. This is a reversal from earlier months, when villas attracted more interest.

The real estate market’s strength is clear despite changes in demand, said Cherif Sleiman, Chief Revenue Officer at Property Finder. There’s a noticeable uptrend towards apartments, opposing the villa demand seen since the pandemic. This trend is expected to continue, especially with operations moving from Dubai International Airport to Al Maktoum International Airport, boosting demand in developing areas.

A Property Finder study found that 64% of tenants preferred furnished apartments with ready interiors, while 33% opted for unfurnished ones. Conversely, villa and townhouse renters showed a preference for unfurnished units (55%) over furnished ones (44%).

Looking ahead, the forecast for population growth among professionals and market supply suggests the trend towards apartment demand will persist, driving up rentals and prices.

Rising Demand in Developing Areas

Industry experts predict increased demand for apartments and villas in areas like Dubai South and along Sheikh Mohamed bin Zayed Road and Emirates Road, driven by the new Dubai Metro Blue Line and the airport operations shift to Al Maktoum International Airport.

Most demand will focus on off-plan units in emerging areas such as Dubai South, JVC, Marjan, Dubailand, Damac Hills, International City, and Silicon Oasis. These areas promise high returns for investors due to the airport development and new residential and hospitality projects.

Off-plan transactions continue to grow, with a year-on-year volume increase of 86.51%, totaling 7,203 transactions. The value increased by 77.09% YoY, reaching around AED 13.9 billion compared to AED 7.8 billion in April 2023.

It is encouraging to see the spike in interest in off-plan options, Sleiman remarked. The diversity of choices and potential high returns on investment, coupled with recent regulatory changes, aim to enhance the quality of the available supply.

Original article reference: Khaleej Times.

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