According to a recent report by Real Trust UAE, more than 297,000 residential units are under construction in Dubai, amounting to 55% of the existing residential property supply. This surge in new units is expected to significantly impact market dynamics in the upcoming years.
The Q2 2024 Dubai Residential Real Estate Market Report by Real Trust UAE highlights that high-demand areas with limited inventory and soaring prices are on the brink of substantial changes. Jumeirah Village Circle (JVC), where property prices have surged dramatically in recent years, is set to gain approximately 30,000 new residential units. This influx could balance the market dynamics in JVC, as these new units represent 80% of its current housing stock.
Business Bay, another area experiencing high demand and rising prices, will see around 20,000 new residential units added. Meanwhile, Dubai South, an emerging hotspot fueled by the announcement of a new airport, is slated to receive 14,000 new homes in the coming years.
These additions are expected to reshape the housing market, impacting supply-demand dynamics and potentially leading to price adjustments in both sales and rental markets, according to Real Trust.
Dubai Real Estate Market Insights Q2 2024
The report also outlines several key indicators of a changing market landscape during the second quarter of 2024. Since September last year, the median residential listing price has been declining month-on-month by an average of 5%, indicating a shift from a seller’s market to a buyer’s market. Additionally, the average days on market for a sale listing increased from 30 days last year to over 90 days.
The secondary or ready market is showing signs of a slowdown, with a 2.9% decline quarter-on-quarter in residential sales transaction volume in Q2, marking the second consecutive quarter of decline. However, the median sales price for residential secondary transactions in Q2 was AED 1.4 million, a 5% increase from Q1.
In contrast, 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% quarter-on-quarter and 64% year-on-year. However, the median off-plan sales price in Q2 was AED 1.54 million, showing a marginal 0.6% decline from Q1 and the second consecutive quarter of decline.
Real estate developers are adjusting 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% feature post-handover payment plans ranging from 12 to 120 months.
Lynnette Sacchetto, Founder of Real Trust and a well-respected voice in Dubai’s real estate sector, notes the evolving market landscape as Dubai’s population continues to grow. In Q1 2024, Dubai welcomed 25,776 new residents, bringing the total population to 3,680,785, further influencing the real estate market’s trajectory.
