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Dubai Real Estate: Top Off-Plan Investment Areas Revealed by Property Experts

The Dubai real estate market is currently experiencing an unprecedented boom in off-plan property sales. Experts have identified the top-performing areas in Q2 2024, signaling promising investment opportunities.

A recent report by property specialist Haus & Haus highlights the remarkable increase in off-plan market sales during Q2 2024. Off-plan transactions comprised 63 percent of total property sales, showcasing robust demand for new developments. Despite a mere five percent growth in the number of launched units, transactions soared by 212 percent year-on-year.

Top Performing Areas for Off-Plan Investment

Jumeirah Village Circle

Jumeirah Village Circle (JVC) remains a hotspot for off-plan investments, ranking first for the number of transactions for the fourth consecutive quarter. In Q2 2024, JVC recorded 3,102 transactions, totaling $805 million (AED 2.95 billion) in sales value. District 10 in JVC emerged as the top off-plan investment opportunity, offering apartments priced between AED 250,000 and AED 2.6 million.

According to Bayut’s Dubai sales market report H1 2024, JVC saw a surge in price per square foot between 5 and 12 percent compared to the same period last year. While property prices in JVC have more than doubled in recent years, the neighborhood is set to receive approximately 30,000 new residential units, equivalent to 80 percent of its current housing stock. This influx of new stock could bring more balance to the area’s market dynamics.

Mohammed Bin Rashid City (MBR City)

The off-plan market in the exclusive district of Mohammed Bin Rashid City (MBR City) reported 1,998 transactions totaling $664 million (AED 2.4 billion), marking significant growth compared to 2023. MBR City is expected to deliver 19,845 units by 2028, including notable projects such as The Crest at Sobha Hartland and the luxurious development by Prestige One, The Waterway, which was announced last quarter.During Q2 2024, neighborhoods like Sobha Hartland and Dubai Hills Estate showed a steady rise in sales price per square foot, with one and two-bedroom homes accounting for the highest number of transactions. Average prices in these neighborhoods increased by 15 and 17 percent, respectively, compared to the same period last year. Popular areas such as District One, District 11, and District 7 continue to show strong off-plan opportunities, with an average return on investment ranging between 7.45 percent and 48.9 percent.

MBR city
Business Bay

Business Bay
Business Bay, known for its high demand and escalating prices, recorded 1,863 transactions with a total sales value amounting to $1.4 billion (AED 4.8 billion). Average gross investment yields held strong at 7.8 percent and have remained steady for the past 12 months. Among the top-performing off-plan projects, Jumeirah Living Business Bay and Bayz 101 attracted significant interest from luxury buyers. The affluent community is set to see an addition of around 20,000 new residential units in the coming years.

Dubai South

Dubai South has become a popular hotspot due to the recent announcement of the Al Maktoum International Airport expansion plans. Last quarter, the area launched several new townhouse and villa communities, resulting in a 75 percent growth in townhouse sales and a 360 percent growth in villa sales year-on-year. Despite this, apartment sales still dominated with 91 percent of sales. In the coming years, Dubai South will have an additional 14,000 new residential units added, according to recent reports.

Dubai south

Market Trends and Future Outlook

Dubai’s off-plan market is witnessing significant growth, with over 52,000 units expected to be completed this year and 78,361 new units launched so far. With 297,000 residential units currently under construction, the market shows no signs of slowing down.

However, some property experts have raised concerns about the impact of the influx of new units on market dynamics and residential property prices over the medium term. According to the latest Q2 2024 Dubai Residential Real Estate Market Report by Real Trust UAE, the median off-plan sales price in Q2 was $419,000 (AED 1.54 million), representing a 0.6 percent decline from Q1 and the second consecutive quarter decline. The report also highlighted that individual sellers in off-plan projects are struggling to sell at opening prices, with many opting to take a loss instead of paying the next developer payment they cannot afford.

Despite these challenges, there remains a healthy demand among investors for off-plan properties. Earlier this spring, the ValuStrat Price Index, Dubai Residential Capital Values revealed a significant 76.3 percent year-on-year increase for off-plan residential registrations, indicating continued investor confidence in the long-term potential of the market.

Dubai’s off-plan real estate market continues to attract investors with its promising growth and high returns, making it a key area to watch for future investment opportunities.

Conclusion

Dubai’s off-plan real estate market continues to attract investors with its promising growth and high returns, making it a key area to watch for future investment opportunities. With significant developments in areas like Jumeirah Village Circle, Mohammed Bin Rashid City, Business Bay, and Dubai South, the market is set to thrive despite potential challenges. As new residential units continue to be launched and completed, investors can expect substantial opportunities and rewards in Dubai’s dynamic real estate landscape.