The second quarter of 2024 has underscored the strength and dynamism of Dubai's residential market despite the flood that took place in April during the quarter. With record transaction volumes, significant growth in both the primary and secondary markets, and a steady influx of new projects, the market is well-positioned for sustained growth. The increasing number of HNWIs relocating to Dubai, coupled with the city's strategic developments, ensures that Dubai's residential real estate market will continue to thrive, offering ample opportunities for investors and end-users alike.
The Dubai residential market witnessed its best quarter ever in terms of transaction volume, with 41,685 residential units sold during Q2 2024 at a total value of 120 billion AED. This period marked a significant milestone, showcasing the market's resilience and robust demand. The average price per square foot for residential real estate increased by 0.6% quarter-on-quarter (QoQ) and 6.2% year-on-year (YoY), reflecting steady appreciation in property values.
Despite anticipation of a drop in interest rates, the market recorded an impressive number of mortgage registrations during the quarter, with a 19% increase YoY. This surge indicates strong buyer confidence and an inclination towards securing properties through financing options, even amidst expectations of favorable lending conditions in the near future.
Primary market transactions(under construction properties), accounted for 61% of all residential sales during Q2 2024, representing 44% of the total transaction value. The off-plan sector surged by 26% QoQ and 74% YoY, driven by high rental rates and a lack of affordability in the ready market. Residents and investors alike are increasingly opting to purchase off-plan properties, drawn by the aggressive launch of new projects. During the second quarter, 42 new projects were launched, adding 9,462 units to Dubai's residential inventory—equivalent to a new project being registered and launched every two days.
Interestingly, the resale of off-plan properties represented 11% of overall primary market transactions. This figure is being closely monitored to identify potential speculation activity. Currently, the number appears healthy and consistent with the previous quarters. Some investors are entering the market at stages where developments are closer to handover, even if it means paying a premium. Similarly, end-users are opting for properties that are nearing completion, preferring the certainty of a soon-to-be-completed home.
The secondary market (ready properties), exhibited stable performance with a 3% increase QoQ and a 5% increase YoY. This segment continues to attract buyers seeking immediate occupancy and established communities, contributing to the overall health and balance of the residential market.
In terms of prime property, the market is segmented into two tiers based on pricing. Properties priced and sold above 10 million AED (2.72 million USD) saw a 14% increase QoQ and a 50% increase YoY, However, properties sold above 36.75 million AED (million USD) experienced a decline, dropping by 28% QoQ and 30% YoY.
The most expensive villa and apartment sold during the quarter were both recorded on Jumeirah Bay Island. A 17,265 square foot custom-made mansion sold for 240 million AED, making it the most expensive property sold during Q2 2024. Additionally, an 11,655 square foot full-floor apartment in Bulgari Lighthouse was sold for 148 million AED, further highlighting the premium nature of this exclusive location.
Dubai's prime property market is poised for continued growth, driven by the influx of high-net-worth individuals (HNWIs) attracted to the UAE's favorable conditions. In 2024, an estimated 6,700 new millionaires are expected to move to the UAE, further fueling demand for luxury properties.
In terms of supply the city currently has 586 projects under construction, comprising a total of 173,755 units scheduled for delivery between now and 2029. Jumeirah Village Circle (JVC) has the highest number of units under construction, with 22,500 units, followed by Business Bay with 15,000 units. This robust pipeline of developments ensures that Dubai's residential market will continue to expand and diversify, catering to a wide range of buyer preferences and investment strategies.
