Dubai expects to hand over 40,000 residential units by 2024, which means Dubai’s real estate market is about to undergo a major transition. The market is seeing an increase in supply with around 100,000 units coming online in 2023, which could tilt the scales in favor of tenants and purchasers. 2023 is a critical year in this change since it comes after a notable 16.4% annual price increase in the housing market. Leading real estate technology company Property Monitor predicts that this increase in supply will affect price dynamics and create a more advantageous market for buyers and renters.
The Increasing Flow Of Provision
With the delivery of nearly 40,000 residential units slated for 2024, Dubai’s real estate market is expected to undergo a significant transformation. This boost in activity comes after the housing industry saw the introduction of almost 100,000 new units the year before.
The Demand-Supply Balance
According to Property Monitor, a major provider in real estate technology and market intelligence, the supply-demand relationship will steadily change in favor of purchasers and renters over the next three to five years due to the rising availability of units. Prices should drop as a result of this change, opening up new options for individuals looking for their dream houses.
● “Population growth will be one of the most important metrics to monitor as both the occupiable and prospective supply grows.
● Over the course of 2023, Dubai’s population increased by less than 3.0% year, with a comparatively steady 0.25 percent monthly growth pattern.
Perspective On Property Prices
Property prices in Dubai are currently little under 4.0 percent above the previous all-time high, at Dh1, 281 per square foot, according to the Property Monitor Dynamic Price Index (DPI). December saw an extra 0.8% gain in average home values, bringing the year to a positive close.
In the 38 months when prices peaked in October 2020, they have increased by 45.7%.
Motivating Factors For The Increase
Due to the consistent number of new project launches, especially in the premium and ultra-luxury classes, Dubai’s real estate market has recently experienced a spike. Even if prices for completed houses are rising, they are still rising more slowly than the prices per square foot of newly constructed homes in the same neighborhoods.
Market Dynamics And Transaction Trends
December saw a record-breaking 9.9% month-over-month reduction in the total amount of sales transactions, with 11,016 sales made overall. With 91% of all sales being residential, this included townhomes, flats, and villas.
The forms of commercial property that saw the most transactions were land sales (2.3%), office spaces (2.6%), and hotel units (2.9%).
“The noteworthy and consistent number of new project launches has been a major factor in the recent year-over-year increase in the pace of price appreciation. The research states that “price increase for completed properties is still strong, but it is somewhat muted when compared to price per square foot rates of new developments within the same neighborhoods.“
The Durable Growth Trajectory
Even though sales transactions decreased by 9.9% in December of 2023, the overall volume of transactions reached 133,673 in 2023—a significant rise of 38.4% over the previous year. Significantly, 90.5 percent of these deals were residential, surpassing the previous high of almost 35,000 sales established in 2009.
Even though December’s sales dropped 9.9% from the previous month, it was still the largest volume ever with 11,016 purchases.
Based on search trends, the site predicts that “this unprecedented boom offers a favorable environment for sellers and landlords in 2024, coinciding with heightened demand spurred by the flood of investors and inhabitants, culminating in unprecedented expansion in the real estate market.“
Factors Causing The Increase
Pundits credit population expansion, an increasing number of professionals entering the market, improved investor demand, and Dubai’s developing reputation as an affluent refuge for the city’s consistent success in the real estate sector. Notably, one major element driving up rental costs is net migration, which is defined as migration outpacing the rate of handovers of new homes.
To Sum Up!
Due to a plentiful supply of property and persistent demand, Dubai’s real estate market is going through a revolutionary era. Setting the foundation for an exciting chapter in Dubai’s property journey, the dynamics of pricing, transaction volumes, and the effect of numerous factors display a real estate market on the verge of unparalleled development.