Dubai Real Estate Market Update: Over 290,000 Residential Units Under Construction
The latest Q2 2024 Dubai Residential Real Estate Market Report by Real Trust UAE reveals a substantial pipeline of new residential units in Dubai, with over 297,000 currently under construction. This figure represents 55 percent of the existing residential property supply and is poised to significantly influence market dynamics in the coming years.
Key Developments in Popular Areas
Jumeirah Village Circle (JVC): Known for its soaring prices due to high demand and limited inventory, JVC is set to receive approximately 30,000 new residential units. This addition is equivalent to 80 percent of its current housing stock and could bring more balance to the area’s market dynamics.
Business Bay: Another high-demand area with escalating prices, Business Bay will see an influx of around 20,000 new residential units.
Dubai South: An emerging hotspot bolstered by the announcement of a new airport, Dubai South is slated for 14,000 new homes in the coming years.
These significant additions to the housing supply across key areas are expected to impact market positioning and alter supply-demand dynamics, potentially leading to price adjustments in both sales and rental markets.
Market Trends and Insights for Q2 2024
– Declining Median Residential Listing Prices : Since September last year, the median residential listing price value has been declining month-on-month by an average of 5 percent, signaling a transition from a seller’s market to a buyer’s market.
– Increased Days on Market: The average days on market for a sale listing have increased from 30 days last year to over 90 days.
– Secondary/Ready Market Slowdown: The secondary market is showing signs of a slowdown, with a 2.9 percent decline quarter-on-quarter in residential sales transaction volume in Q2. This marks the second consecutive quarter of decline in this segment. However, the median sales price for residential secondary transactions in Q2 was AED 1.4 million, showing a 5 percent increase from Q1.
– Active Off-Plan Market: The off-plan market remains active, with 78,361 new units launched in 2024 so far. Off-plan sales transactions in Q2 increased by 18 percent quarter-on-quarter and 64 percent year-on-year. However, the median off-plan sales price in Q2 was AED 1.54 million, representing a marginal 0.6 percent decline from Q1 and the second consecutive quarter of decline.
Developer Strategies and Market Adaptations
Real estate developers are adapting to changing market conditions by offering more competitive products through incentives, discounts, and extended post-handover payment plans. Of the newly launched projects this year, 34 percent feature post-handover payment plans, ranging from 12 to 120 months.
Lynnette Sacchetto, Founder of Real Trust and a respected voice in Dubai’s real estate sector, notes that as Dubai’s population continues to grow—with 25,776 new residents in Q1 2024, bringing the total to 3,680,785—the real estate market is expected to continue evolving.
Conclusion
With a substantial number of residential units under construction and strategic adaptations by developers, Dubai’s real estate market is on the cusp of significant change. Buyers and investors should stay informed and consider how these developments might impact their real estate decisions in the coming years.