Dubai’s property market continued to see prices rise in 1Q 2024 —Espace: Dubai’s residential property market reeled in AED 87 bn in 1Q 2024, marking an increase of 26% y-o-y, according to Dubai-based real estate agency Espace’s latest {market insights report (pdf)}. The emirate recorded over 34k sales transactions during the quarter, up 22% y-o-y on the back of increased transaction activity in the luxury property segment.

ICYMI #1- A previous report by Dubai-based real estate broker Springfield Properties estimated a similar price growth percentage (25.9%), though it pegged the overall value of sales at AED 109.8 bn. The report also recorded some 37.1k transactions during the quarter, down 0.5% y-o-y, and different from Espace’s estimate of an uptick in market volume.

Average prices inflated in 30 communities, with villa and townhouse prices growing 27% y-o-y and apartment prices increasing 18% y-o-y. Jumeirah Islands noted the largest price increase (49% y-o-y) across villas and townhouses, while JVC recorded the highest increase (30% y-o-y) across apartments. Jumeirah Golf Estates’ sales prices remained flat, owing to a 78% y-o-y surge in transaction activity for the lower price point.

Rentals were less popular: Transaction activity across the rental market continued to decline in most communities, driven by high rental prices, an affordable mortgage market, relaxed visa regulations, and ongoing population growth pushing tenants towards homeownership, the report adds. Arabian Ranches 3 and Jumeirah Islands were the only two villa and townhouse communities to record rental transaction volume increases during the quarter, increasing 127% y-o-y and 17% y-o-y, while Emaar Beachfront, Bluewaters Island, and Downtown Dubai saw increases of 189% y-o-y, 73% y-o-y, and 2% y-o-y in the apartments market.

Palm Jumeirah recorded the highest rental price increase among villa and townhouse communities, growing 63% y-o-y, followed by Dubai Hills (+36% y-o-y) and Meadows (+35% y-o-y). Bluewaters Island saw the highest rental increase in the apartments market, recording a 64% y-o-y increase.

Are the luxury and secondary segments seeing a slight slowdown? The volume of luxury homes between AED 10-20 mn sold fell 37% q-o-q, while the volume of sales of homes above AED 20 mn fell 32% q-o-q. The secondary market is also slowing to a more “realistic and sustainable levels of activity,” according to the report. More than half of units sold — roughly 19.7k — during the quarter were off-plan, while the secondary market saw 14.3k homes handed over, marking an 11% q-o-q decline. The secondary market collected slightly more in sales, however, racking up AED 44 bn compared to AED 43 bn in the off-plan market, according to Espace.

On an annual basis, the secondary luxury market continued to see growth: Secondary homes priced above AED 20 mn witnessed a 55% y-o-y growth in transaction activity during the period, while homes priced between AED 10-20 mn experienced a 48% y-o-y increase. Secondary properties valued at below AED 5 mn and between AED 5-10 mn saw less dramatic increases in trade volume, growing at 10% y-o-y and 16% y-o-y.

ICYMI #2- Some 105 homes priced over USD 10 mn were sold in Dubai in 1Q 2024, marking a 19% y-o-y increase on the back of heightened buyer interest from “international high-net-worth individuals vying for the city’s most expensive homes” and reduced supply, global property consultant Knight Frank said recently.

Secondary market figures weren’t as pronounced in Springfield’s estimate: While Springfield Properties’ report similarly highlights off-plan units as dominating market volume and share, it reports a much lower sales figure — AED 8.2 bn — and a handover of just 12.7k units, compared with AED 50.4 bn in sales for off-plan properties.

Tags: