An IMGW News Report
The Dubai property market has experienced an extraordinary surge in transactions, with both property sales and rental prices soaring by over 20 per cent, as noted in the latest edition of CBRE (Coldwell Banker Richard Ellis) Middle East’s Dubai Residential Market Notes.
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Record-Breaking Transactions
In May 2024, Dubai witnessed 15,766 residential transactions—the highest monthly figure on record—marking a 44.2 per cent increase from the previous year. Year-to-date figures up to May 2024 reveal 62,180 sales transactions, representing an astounding 384.3 per cent rise from 2019 and a 30 per cent increase from the 2023 high.
Market Growth
This impressive growth has been driven by a 42.6 per cent rise in off-plan sales and an 11.3 per cent increase in secondary market sales. Despite the surge in high-end property sales, the affordable and core market segments remain crucial, with substantial opportunities still available.
Price Bracket Dynamics
May 2024 saw a 19.3 per cent decline in transactions below AED1,000 ($272) per square foot. However, the core market, with transactions between AED1,000 and AED2,000 per square foot, grew by 64.1 per cent year-on-year. Transactions in the AED2,000 to AED3,000 bracket increased by 154 per cent, highlighting strong demand for mid-range properties. Conversely, sales of properties priced between AED3,000 and AED8,000 per square foot fell by 19.5 per cent due to limited supply.
Properties priced above AED8,000 per square foot constituted only 0.2 per cent of total sales in May 2024, down from 0.3 per cent the previous year, reflecting limited demand and availability.
Price Growth
The market’s robust activity has driven notable price growth, with average residential prices in Dubai increasing by 20.1 per cent year-on-year in May 2024. Apartment prices rose by 19.8 per cent, while villa prices surged by 21.8 per cent. Palm Jumeirah recorded the highest sales rates, with apartment and villa prices reaching AED 2,804 and AED 5,228 per square foot, respectively.
Rental Market Trends
Demand in the rental market remains strong, with average residential rents in Dubai rising by 21.1 per cent in the year to May 2024. This includes a 22.2 per cent increase in apartment rents and a 13.1 per cent rise in villa rents. High demand in core and prime areas has led to significant rent increases in secondary communities.
Outlook
CBRE anticipates continued rental rate growth, albeit at a slower pace due to emerging affordability constraints. Taimur Khan, Head of Research – MENA at CBRE, remarked on the unprecedented demand levels, with May 2024 seeing the highest number of transactions on record. He highlighted that new launches might not dampen prices significantly as absorption rates remain high, with 70 per cent of units launched since 2022 already sold.
In established residential areas, absorption rates exceed 80 per cent, nearing 100 per cent in prime communities. Owner-occupiers are a significant portion of off-plan market demand, suggesting future relief for the rental market but stable sales prices. Recent data indicates growing price stability, with 88.4 per cent of listings’ prices unchanged year-to-date, up from 79.7 per cent the previous year.