Off-Plan Property market of Dubai surges as secondary property market, which had experienced explosive growth driven by high investor demand, is now exhibiting signs of a slowdown.
Secondary market sales in Dubai witnessed a 10.2% decline in August 2023 compared to the previous year.
Additionally, the tenancy market is showing a slight moderation, with average rents in Dubai increasing by 21.7% in the year leading up to August 2023.
This figure represents a marginal dip from the 22% growth recorded in July 2023.
Robust Initial Growth
The secondary property market in Dubai initially emerged as one of the most robust segments following the relaxation of COVID-19 restrictions.
This impressive growth was primarily fueled by substantial demand from international investors hailing from countries such as France, the United Kingdom, Italy, and Russia.
Shift Towards Secondary Properties
Notably, during the first quarter of 2022, secondary properties dominated real estate transactions, constituting more than half (58%) of the total sales. These properties were particularly appealing to investors.
Rise of Off-Plan Properties in Dubai
While secondary property sales saw a decline, off-plan properties experienced a remarkable surge, boasting a growth rate of 58.7%. This trend indicates a shifting preference among buyers.
Overall Market Performance
Despite the cooling effect in the secondary market, Dubai’s property market continues to exhibit substantial growth.
In August alone, the total volume of residential transactions reached 11,328, marking a significant 22% increase compared to the previous year.
In the year-to-date leading up to August 2023, the total volume of transactions reached a record-high of 79,605, reflecting a remarkable 41.7% increase from the previous year.
Average property prices in August also showed a steady rise, increasing by 19.6% year-on-year, compared to 18.1% in July.
Holiday Homes and Short-Term Apartment Rentals in Dubai
Amidst these market dynamics, Dubai’s holiday homes sector has been gaining attention. Holiday home rentals in Dubai have been on the rise, offering attractive short-term apartment rentals in Dubai for tourists and travelers. This segment presents an appealing investment opportunity for those looking to cater to the growing demand for holiday accommodations in the city.
While Dubai’s secondary property market is experiencing a slowdown, the overall property market remains robust, with off-plan properties gaining traction. Furthermore, the holiday homes sector is emerging as an attractive option, providing short-term apartment rentals in Dubai for visitors seeking a comfortable and convenient stay. Investors should carefully consider these evolving market trends in their real estate strategies.