Dubai real estate Q1 2024: Apartment launches surged by 22%, villa launches declined by 30%

According to Cushman & Wakefield ‘Core’s Q1 2024’ market update, Dubai’s sustained transaction volume growth and robust performance indicators in Q1 2024 reaffirm its status as a global economic hub and investment hotspot. This position is bolstered by sustained population growth, favourable visa regulations, upbeat market sentiment and a booming tourism, commercial and hospitality market.

Over 8,351 units were handed over in Q1 2024 while an additional 29,690 units are expected to be handed over between Q2 to Q4 2024, bringing the yearly forecast for 2024 to nearly 38,000 units – albeit broadly in line with 2023 handover figures.

In Q1 2024, there was a notable increase in villa deliveries, making up 38% of all handovers. Key villa handovers included Ruba Townhouses in Arabian Ranches 3 and Mag Eye Townhouses in Meydan. Additionally, important apartment handovers in the same period were Marina 101 in Dubai Marina, Me Do Re in Jumeirah Lake Towers, and various developments in Azizi Riviera in Meydan One.

Apartment vs. villas

In Q1 2024, apartment project volumes increased by 22% compared to Q1 2023, while villa project launches experienced a sharp decline of 30%. Despite the continued demand for villas, developers have been slower to respond due to limited land acquisition opportunities.

Notable announcements in the villa market during Q1 2024 include Phase 1 of The Acres by Meraas in Dubai Land, The Valley Farm Gardens 2 by Emaar near Dubai-Al Ain Road, and South Bay by Dubai South Properties in Dubai South. In the apartment market, key launches were Azizi Venice by Azizi Developments in Dubai South, Bayz 101 by Danube Properties in Business Bay, and Address Residences Zabeel Tower by Emaar Properties in Zabeel First.

The ultra-prime market puts up a good show

In Q1 2024, there was a significant rise in ultra-prime residential property sales in Dubai, with a record 402 properties being sold for over AED 20 million. This marks a 40% increase compared to the previous year. The majority of these high-value transactions were focused in popular areas such as Jumeirah Bay Island, Palm Jumeirah, Dubai Hills Estate, and Tilal Al Ghaf.

“With growing UHNI demand for luxury properties, particularly waterfront properties and branded residences, we foresee this segment to remain strong as global wealth continues to gravitate to Dubai,” says Prathyusha Gurrapu, Head of Research & Consulting at Cushman & Wakefield Core.

A stable secondary market

The off-plan market experienced a 22% increase year-on-year, while the secondary market saw a 16% increase. Transaction volumes have been on the rise but the pace of increase has slowed down compared to previous quarters. This moderation in volumes is expected to have a slight impact on sales prices, especially in the affordable and mainstream market sectors. The widening gap between bid and ask prices, fuelled by concerns about affordability, is likely to contribute to this softening effect on sales prices.

“Secondary market transaction volumes have stabilised 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,” adds Gurrapu.

Residential prices are on an upward trajectory

Transaction volumes are beginning to show some slowing down, but capital values continue to rise steadily. City-wide sales prices have increased for the 15th consecutive quarter, with a 20% year-on-year growth and a significant 66% increase compared to pre-COVID-19 levels in Q1 2020.

“The majority of villa districts have seen a 20% increase in sale prices. The surge in prices is due to the trend of renovating and reselling units at higher prices, which has raised the average price in areas like The Lakes and Jumeirah Park. These areas have central locations with established schools and amenities, along with spacious layouts, making them desirable after upgrades and able to fetch significant premiums,” explains Gurrapu.

In the apartment segment, prices are still rising but the rate of increase has slowed down, especially in the prime sub-markets like Palm Jumeirah, City Walk, Downtown Dubai, and Dubai Marina. Sales price increases in these areas have dropped to under 20% year-on-year.

Affordable and mid-market apartment communities in Dubai have experienced a significant increase in prices, with some seeing a sharp rise of 30% or more. Examples include Discovery Gardens with a 37% increase, Dubai Sports City with a 34% increase, and Dubai Land with a 32% increase. These areas have lower base prices compared to luxury properties, making them more accessible to buyers looking for more budget-friendly options.

Rising rents impacting affordability

City-wide rents have been increasing for 13 consecutive quarters, with a 20% year-on-year increase and a 72% increase compared to pre-COVID-19 levels in Q1 2020. However, household incomes are not rising in line with the rents, leading to a contraction in disposable incomes.

“Villa rents are starting to show signs of moderation, with some communities experiencing downward pressure on rents due to heavy rains. Meanwhile, apartment rents continue to see sharp increases, particularly in affordable and mid-market districts. Discovery Gardens, Dubai Land, and Dubai Sports City all saw significant year-on-year rent increases, while prime districts like Palm Jumeirah and Downtown Dubai saw more moderate increases compared to previous quarters,” adds Gurrapu.

The increasing rents and rental yield levels are predicted to encourage more end-user purchases, especially in the ready market. Mortgage costs are projected to decrease in the coming quarters, making it more affordable for buyers. Additionally, rents are expected to continue to rise, making ownership a more attractive option for those looking to invest in property.


Dubai real estate Q1 2024: Apartment launches surged by 22%, villa launches declined by 30% (image)

Related News

World’s ultra-rich to spend $4.4bn to buy property in Dubai (image)

World’s ultra-rich to spend $4.4bn to buy property in Dubai

Demand is strong for ready property compared to off-plan developments
The National • 2024-05-22 00:00:00
Investors make luxury upgrades to properties, earn millions (image)

Investors make luxury upgrades to properties, earn millions

Addition of features such as cinemas, indoor and outdoor pools allow owners to charge a high premium amid a shortage of such properties in hotspot areas
Khaleej Times • 2024-05-16 00:00:00
Dubai real estate: Is it still profitable to invest? experts weigh in (image)

Dubai real estate: Is it still profitable to invest? experts weigh in

As property prices reach an all-time high, experts reveal which investment opportunities offer the most profitability
Arabian Business • 2024-05-15 00:00:00

With your permission we and our partners would like to use cookies in order to access and record information and process personal data, such as unique identifiers and standard information sent by a device to ensure our website performs as expected, to develop and improve our products, and for advertising and insight purposes.

Alternatively click on More Options and select your preferences before providing or refusing consent. Some processing of your personal data may not require your consent, but you have a right to object to such processing.

You can change your preferences at any time by returning to this site or clicking on Privacy & Cookies.