Q1 2024 Dubai Real Estate: Off-Plan vs. Ready Property Sales Analysis
Dubai’s real estate market remains a beacon for investors, with the first quarter of the year seeing the purchase of over 36,000 properties.
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According to the Property Finder’s Market Watch digest for the first quarter of 2024, the Dubai real estate market has continued to attract attention for both off-plan and ready properties.
The report highlights that the sector saw more than 36,000 sales transactions during this period, marking it as the second-highest quarter for transactions on record.
The start of 2024 has witnessed robust demand for existing real estate projects in Dubai, signaling a strong market.
Surge in Dubai Real Estate Sales
The market for ready/existing properties saw nearly 19,600 transactions in the first quarter, accounting for 54% of all sales, up from the previous year’s 15,000 transactions which made up 48%. This represents a growth of 30% in volume over the same quarter last year.
The value of transactions for existing properties soared to AED78.2 billion ($21.3 billion), making up 68% of the quarter’s total sales value, an increase from 60% the previous year. This marks a significant 46% increase in value compared to Q1 2023’s AED53.6 billion ($14.6 billion).
Off-plan properties also saw movement, with about 16,600 transactions, slightly up from 16,000 in the previous year, representing a modest year-on-year volume increase of 4%.
The value of off-plan transactions for the quarter reached AED37.4 billion ($10.2 billion), accounting for 32% of the total transaction value, a 5% increase from the previous year’s AED35.5 billion ($9.7 billion), which represented 40% of the total value.
This positive trend provides a promising landscape for developers and brokers, underlining the sector’s growth and the opportunities that lie ahead in 2024. Data from the Dubai Land Department (DLD) confirms the upward trend, with over 36,000 transactions recorded, a 17% increase from the previous year.
Cherif Sleiman, Chief Revenue Officer at Property Finder, comments on the promising start to 2024, highlighting the diversified demand in the sector and the positive impact expected in the coming months.
Enhancing Transparency and Limiting Rent Increases
Meanwhile, in an effort to streamline rental adjustments and enhance transparency, Dubai’s Real Estate Regulatory Authority (RERA) has revised the rental evaluation process.
Effective April 1, landlords seeking to increase rent must now obtain a legal order or judgment, a move from the previously used rental calculator benchmark. This change, facilitated through the Rental Dispute Centre (RDC), aims to provide a fair and transparent basis for rental evaluations.
The revised RERA rent calculator, introduced on March 1, serves as the definitive guide for determining rental increases, limiting landlords from exceeding set benchmarks and ensuring fairness for tenants. The adjustment is seen as a move to solidify transparency and reliability in rental transactions.
According to early Q1 data, there have been 72,885 rental contract renewals, reflecting the significant volume of decisions made by tenants and landlords alike. This shift towards a more regulated evaluation process is expected to foster a fairer rental market.
The adjustments to the RERA calculator and the decrease in rental contract renewals by 7.2% year-on-year hint at a growing interest among tenants in homeownership, particularly in light of the rising rents.
This trend is further supported by attractive post-handover payment plans offered by developers, encouraging tenants to consider purchasing homes nearing completion.
This regulatory shift and market dynamics are anticipated to further encourage Dubai’s tenants towards homeownership, offering them a pathway to secure long-term housing solutions amidst the evolving real estate landscape.