Dubai’s real estate market continues to experience substantial shifts as record-high property prices and enticing off-plan payment schemes push buyers out of prime locations and into more affordable outskirts.
During the Covid-19 pandemic, property prices in key areas such as Downtown, Business Bay, Palm Jumeirah, Marina, Sheikh Zayed Road, and Dubai Hills Estate saw consistent single- to double-digit quarterly growth, driven by high demand from millionaires and ultra-wealthy individuals relocating to the emirate.
This surge has now extended its influence beyond the high-profile districts, sparking significant price growth in more affordable and suburban communities. As buyers face increasing prices in central areas, the demand for more budget-friendly alternatives is elevating the suburbs.
Prathyusha Gurrapu, head of research and consultancy at Cushman & Wakefield Core, highlighted that sales prices across the city continued their upward trajectory for the 17th consecutive quarter in Q3 2024, showing an impressive 20 per cent year-on-year increase.
“Villa prices soared by 23 per cent year-on-year, while apartment prices experienced a 19 per cent rise in Q3,” Gurrapu noted. “Suburban and budget-friendly communities have been at the forefront of the market growth.”
Cushman & Wakefield Core’s data reveals that areas such as Discovery Gardens led the price hikes with a staggering 43 per cent increase, followed by Jumeirah Lakes Towers and Dubailand (Remraam), which saw jumps of 34 per cent and 28 per cent, respectively. City Walk and Dubai Hills Estate had more moderate price increases of 12 per cent.
Gurrapu added, “This shift emphasizes the growing desire for value-driven investment options in suburban locales as buyers are priced out of central areas and seek opportunities in more remote, cost-effective regions.”
Alongside the market’s price trends, Dubai developers have adapted by offering aggressive off-plan payment plans to cater to the growing demand. These structures, often involving split payment terms like 80/20 or 75/25, allow buyers to secure properties with more manageable initial outlays while developers promise timely project completions. However, with rising construction material costs and challenges in finding reliable contractors, the process can be difficult.
Asteco, a Dubai-based real estate property services firm, emphasized that the continuous high demand for off-plan properties has led to the adoption of these ambitious payment schemes. “These payment structures make it harder for lower-income families and individuals, especially those seeking larger apartments or villas,” said Asteco.
Despite these challenges, off-plan transactions remain strong. Properties in prime locations and those developed by reputable firms often sell out swiftly, sometimes within hours. The success of these transactions stems from a mix of factors: the developer’s reputation, prime locations, quality offerings, competitive pricing, and the appeal of favorable payment plans.
