Robust Growth in Dubai’s Residential Real Estate: Morgan’s

With record-breaking transaction volumes and robust activity across both primary and secondary markets, the sector is poised for further expansion

Dubai’s residential market has entered a remarkable phase of growth and resilience in the third quarter of 2024, according to Morgan’s International Realty’s ‘Q3-2024 Dubai’s Residential Market Report’. With record-breaking transaction volumes and robust activity across both primary and secondary markets, the sector is poised for further expansion. This vibrancy is fueled by strategic urban developments and a significant influx of high-net-worth individuals (HNWIs) relocating to the city, creating a wealth of opportunities for investors and end-users alike.

In Q3 2024, Dubai’s residential market achieved unprecedented transaction volumes, with 47,663 units sold, translating to a total value of 130.69 billion AED. This milestone underscores the market’s resilience and strong demand, with the average price per square foot for residential properties reaching 1,537 AED, indicating a consistent upward trend in property values.

Cash and Mortgage Transactions

A noteworthy trend emerged in mortgage registrations, with 54% of transactions financed through mortgages. This reflects a strong buyer confidence and a preference for leveraging financing options, even amidst expectations of declining interest rates. The willingness to secure properties through mortgages highlights the market’s robust health and the strategic decisions being made by buyers.

Primary Market Insights

The primary market, encompassing under-construction properties, accounted for 64% of all residential sales, with a total transaction value of 64.91 billion AED. The off-plan sector has seen substantial growth, driven by high rental rates and a lack of affordability in the ready market. The launch of 104 new projects added 24,241 units to Dubai’s residential inventory, attracting both local residents and international investors. Interestingly, the resale of off-plan properties constituted 8% of primary market transactions, indicating a stable environment for speculative activity.

Secondary Market Insights

The secondary market, which includes ready properties, maintained a steady performance, representing 36% of total transactions and contributing 65.78 billion AED to the overall transaction value. This segment continues to attract buyers seeking established communities and immediate occupancy, reinforcing the market’s overall health and balance.

Prime Real Estate Market

The prime property market, defined by transactions exceeding 10,000,000 AED, recorded 1,080 transactions this quarter. This segment remains highly attractive to HNWIs, serving as a secure investment for wealth preservation. Prime properties not only retain their value but also offer strong potential for rental income. Notably, the most expensive property sold this quarter was a luxurious five-bedroom condominium in The One at Palm Jumeirah, fetching 275 million AED.

Supply Analysis

Currently, Dubai is witnessing the construction of 690 developments, set to deliver 197,996 units by 2029. Key areas like Jumeirah Village Circle (JVC) and Business Bay are seeing significant activity, with 23,225 and 16,292 units under construction, respectively. This robust pipeline ensures that Dubai’s residential market will continue to diversify and expand, catering to a wide range of investment strategies and consumer preferences.

To sum it up, Dubai’s residential market is not only thriving but is also positioned for sustained growth. The combination of strategic developments, a strong pipeline of new projects, and the ongoing migration of HNWIs creates a dynamic landscape filled with opportunities for both investors and end-users. As the market evolves, it remains a beacon of resilience and potential in the global real estate arena.

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