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As we close the first quarter of 2024, it’s important to reflect on the movements within the Dubai Real Estate market and look at some Off Plan and Ready property statistics. As NST Real Estate is a German agency we have a penchant for precision and factual data, we believe in equipping our clients with a detailed analysis before buying an apartment or house, to guide their investment decisions effectively. Whether you’re considering purchasing an apartment, house, or villa, we’ve distilled key insights from the Dubai Land Department to give you a clear picture of the market dynamics over the past three months.
Off Plan versus Ready Properties
In a previous blog post focused on remote investment opportunities for foreign investors, we highlighted the importance of considering off-plan projects as a preferable investment route.
Reflecting on the statistics from the first quarter of 2024, the preference for off-plan projects is evident.
Accounting for 61% of all sales transactions, the off-plan market has significantly led the way, leaving only 39% of transactions pertaining to completed properties in the secondary market.
To delve deeper into this comparison and provide a more nuanced perspective, examining the total sales value reveals a contrasting story. The cumulative value of all completed properties sold on the secondary market reached an astonishing 43,430,000,000 AED. This stands in stark contrast to the off-plan market, which accounted for a comparatively lower total value of 24,260,000,000 AED.
Price Ranges for sold properties, Off Plan and Secondary Market
For property investors, it’s crucial to be aware of the most popular price ranges, as this knowledge significantly simplifies the future resale of your apartment or villa.
This information is particularly valuable for foreign investors not intending to reside in their properties, as it helps identify the price brackets with the highest availability of options.
The chart distinctly points to a preference for entry-level properties, ranging from under one million AED to between one and two million AED, indicating a clear trend towards more affordable investment options.
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Sales Transaction Comparison: Q1 2023 versus Q1 2024
Reflecting on past trends is always insightful, as it can offer clues about the future direction of the Dubai Sales Market.
The comparison with the previous year reveals a robust increase in apartment sales transactions. With 28,740 apartment sales, there’s been a 25.4% surge compared to Q1 2023.
However, the scenario is different for villa sales, where we observe a decline in transaction numbers. There’s been a decrease of 51.3% compared to Q1 2023, indicating a shift in market preferences.
What can we learn from these numbers?
The contrasting trends in the Dubai real estate market, with decreasing villa sales and increasing apartment transactions, reveal several underlying dynamics and potential shifts in buyer preferences and market conditions. Here’s what we can learn from these numbers:
- Affordability and Accessibility: The increase in apartment sales suggests a growing demand for more affordable and accessible housing options. Apartments typically offer a lower entry price point than villas, making them more accessible to a broader range of buyers, including first-time homeowners and investors looking for lower-risk investments.
- Investment Strategy: For investors, apartments in high-demand areas can offer better rental yields and easier resale compared to villas, given the higher demand among renters for such properties. This could explain the increased transactions in the apartment sector as investors target properties with high rental demand and liquidity.
- Prospective Adjustments in Villa Pricing: For those contemplating the purchase of a villa in Dubai, the current market trends suggest promising entry opportunities may be on the horizon. Although prices for villas and townhouses have historically risen, the recent decrease in sales transactions indicates a resistance among buyers to current price levels. This resistance suggests that the market could be approaching a short-term peak in villa prices. While there are no guarantees, this scenario hints at potential adjustments leading to more favorable entry prices for villas and townhouses in the near future, driven by a recalibration of buyer and seller expectations.
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Damac Lagoons, DubaiFor those who want to make your own research, we recommend visiting the official website of the Dubai Land Department.
