The Demand For Real Estate Soars in Dubai

The real estate market in Dubai keeps expanding even through global challenges. This year’s first quarter ended quite strongly as the industry gained 43.2k transactions, which amounted to AED 115 billion.

The month of June especially generated outstanding numbers. It even broke a 13-year-old record by receiving 8,850 transactions with a value of AED 22.10 billion. With such massive figures, it witnessed a growth of around 41% compared to June last year.

And in the following month of July, the average residential costs boosted by 9.9% yearly, with villa costs surging 17.8% and flat costs rising 8.7%. Each month, the cost of villas grew 0.8%, and flats grew 1% in July. Despite the usually subdued activity level in the summer, sales in the city’s residential sector were buoyant in July. It recorded 6,524 units being sold that month, more than 50.8% from last year.

The stats mentioned above show that the real estate market is booming and will be unaffected by global hindrances. Diving deeper into the statistics delivered by Dubai’s Biggest real estate brokerage “Luxuryproperty.com” in the last few months also makes it clear that there has been a surprising increase in demand for these properties.

Therefore, let’s explore more about the unprecedented demand for residential properties for sale in Dubai.

A Significant Shift in Demand in the Emirate’s Real Estate Market

Off-plan Properties Vs. Ready-to-move-in Units

Real estate industry research has finalized that buyers are especially interested in spacious and ample living spaces, particularly in low-density regions. This is among the main reasons there is so much demand for readymade properties instead of off-plan units.

Another factor that has shifted the buyers’ focus to readymade or secondary properties is the cost. The prices for off-plan properties are steadily increasing, making potential buyers take an interest in secondary properties instead.

These properties are recording a higher growth rate as opposed to readymade units. Therefore, the ones with tight budgets are now hunting for secondary properties. But on the other hand, investors continue to prefer off-plan properties due to the perks they present.

Opulent Properties On The Rise

The real estate on sale in Palm Jumeirah is still enjoying great interest due to the availability of wealthy homes. The region, despite high costs, is still gaining the interest of elite buyers and investors. The expenses of villas for sale in Palm Jumeirah have increased by 51% in the last year and 68% since the pandemic’s start.

A similar trend is followed in other neighborhoods that boast luxurious properties for sale in Dubai. For instance, the costs of villas for sale in Dubai Hills Estate and District One amplified by 30% last year. The unquenchable global demand has driven luxurious rental prices by an unbelievable 70.3% in the previous year.

But the caution to this enviable growth is that the average transacted costs in these coveted neighborhoods stand at AED 2,900 per square foot. This makes the city a highly affordable opulent residential market in the world. What’s more, it is cheaper than the coveted areas of London or New York.

Depending on the latest real estate trends, the city’s properties are expected to double the market share this year. The limited delivery of opulent homes will also lead to their higher demand. With the surging trend of the elite class, millionaires, and entrepreneurs making Dubai their home, the market is expected to further boost in the year’s second quarter.

Based on an estimate, approximately 4,000 elite individuals will shift to the Emirate in 2022, and a significant credit for this goes to the city’s expat-friendly policies. Plus, the reformed business ownership laws are also gaining the interest of entrepreneurs.

Villas Vs. Apartments

Considering the statistics about venture success this year, flats are a winner in the contest with villas. The introduction of new villas is also restricted as opposed to flats. According to the records, only 3.6% of the planned villa projects will occur this year. As a result, the cost will be on the expensive side.

Even though the latest communities displaying townhouses and villas in the Emirate are being planned at rocket speed, the handover is not anticipated until the end of 2024. This means that flats for sale in Dubai will keep enjoying the higher demand.

The comparatively budget-friendly cost is another reason high-end investors and buyers attract the flats. Moreover, a host of innovative amenities and services they accompany also prove them to be a worthy preference for many.

The Shifting Dynamics in the Rental Market

This year is also observing shifting dynamics in the city’s rental market. Some regions have recorded a surge in rent, while others have depicted a decline. But the average rental cost of flats and villas has increased by 21.2% and 24.7%, respectively, in the last year. Currently, the average rental price of apartments in the city is AED 85,204. That said, the villas come with a rental cost of AED 255k per year.

Among the ones that have featured a surge, Palm Jumeirah happens to be at the forefront for flats. Their average rental cost has increased to AED 218,413. The apartments for rent in Discovery Gardens have witnessed a surge of 4.9%, followed by Downtown Dubai (4.3%), Jumeirah (4.3%), and Living Legends (4.8%).

Arjan, Dubai International Financial Centre, The Greens, Liwan, Business Bay, and Festival City are the other noteworthy neighborhoods where rent for flats has boomed. But The Old Town, Green Community, and Deira are the regions where the rental cost for apartments has declined.

Regarding villas for rent in the city, Jumeirah Islands and Emirates Hills, with 4.9% each, submitted a more significant increase. It was followed by Victory Heights (4.6%), The Sustainable City (4.8%), Mudon (4.3%), and Jumeirah Golf Estates (4.3%). The Springs, The Meadows, and Green Communities have witnessed a decline in the rental costs for villas in the Emirate.

Wrapping it up

The Emirate real estate market, is expected to keep moving forward during the year’s second quarter and beyond. Opulent properties and villas will dominate, whereas flats will also showcase growth.