A recent report showed that more than 8,000 new properties entered the Dubai real estate market during the first quarter of 2024.
According to Cushman & Wakefield Core’s Q1 market report for Dubai, more than 8,351 units were handed over during the first 3 months of 2024, which were “in line with market demand.”
Between Q2 and Q4, 29,690 units will be handed over, bringing the yearly prediction to nearly 38,000 units.
“While the upward trajectory continues across all performance indicators, including rents, sales prices, and occupancy levels, we are starting to see the pace moderate in the residential market,” said Prathyusha Gurrapu, the company’s Head of Research and Consulting.
Expected surge in new real estate project launches
Apartment project launches rose by 22%, while villa launch volumes slumped by 30%.
“Despite the sustained demand for villas, developers remain slower in responding to this surge, largely because of limited land acquisition opportunities,” Gurrapu added.
The company said in a statement on Tuesday that the overall supply of residential properties and expected delivery figures remain in line with forecasts, pointing to no major headwinds of oversupply in the near future.
However, it pointed out that many project launches could impact the supply-demand equilibrium after two to four years, when most projects are scheduled for delivery, provided they are delivered on time.
This arrives from the Al Maktoum International Airport announcement, which is anticipated to further amplify Dubai South, Expo City Dubai, Expo Village, and the surrounding areas for residential, hospitality, commercial, and industrial asset-class developments in the near—to mid-term.
Off-plan, secondary real estate markets stabilizing
Off-plan transaction activity continues to dominate with a 22 percent year-on-year increase as the secondary market stabilizes at a 16 percent rise.
“It is interesting to note that while transaction volumes are up, the secondary market transaction volumes have stabilized over the last three quarters, indicating sustained levels of end-user demand, whereas off-plan launch volumes have shown large variances based on prominent project launches – albeit with an overall upward trajectory,” Gurrapu added.
The city’s real estate market shattered previous records in Q1 with over 34,000 overall transactions, marking a 20 percent increase compared to last year. It has been the most dynamic quarter on paper for the emirate’s property sector.
Conclusion:
In conclusion, Dubai’s real estate market exhibited robust growth in Q1 2024, with over 8,000 new units entering the market, aligning with demand. However, the impending surge in project launches, especially residential developments, could disrupt the supply-demand equilibrium in 2-4 years.
The off-plan market dominates transaction activity, while the secondary market stabilizes, indicating sustained end-user demand.
Despite shattering previous records with over 34,000 transactions, maintaining a healthy supply-demand balance remains crucial for Dubai’s dynamic real estate sector.
