Is Dubai’s property market finally carrying out a balanced, mature segment? Recent statistics indicate that the market isn’t always about rapid booms and busts however approximately a constant, sustainable path. Buyers are increasingly finding alternatives within reach, and houses priced below Dh1 million are at the upward thrust. Investors, too, are seeing new statistics factors that display a clearer picture of where Dubai’s property marketplace stands. This article provides you with a look at the latest indicators of maturity in Dubai’s real estate sector.

Dubai Realty Shows Increasing Signs Of Maturity 

Rising Value Index

The Dubai real estate market has displayed strong valuation growth, with a quarterly increase of 6.7% and an annual rise of 28.9%, reaching 190.1 points.   For the first time, Dubai’s freehold villa communities surpassed price peaks ten years ago, with 98% of villas doubling in value since the pandemic began in 2020. Apartments, which account for more than 80% of Dubai’s housing inventory, have not seen such increases, except for a few areas like Palm Jumeirah.

Strong Momentum Market

The villa market has retained a solid pace, reaching a valuation index of 243.2 points. This reflects a slower annual increase of 33.1% but shows steady quarterly growth at 7.4%. Dubai’s most popular villa locations have seen annual price hikes, with Palm Jumeirah recording a 42.8% rise, Jumeirah Islands at 42.3%, and Emirates Hills at 33.8%. In contrast, areas like Mudon and Jumeirah Village Triangle have experienced more modest gains of 20.4% and 20%, respectively.

Apartments also experienced an uptick in valuations, with annual growth moving from 23.4% in the previous quarter to 24.8% in the third quarter. Leading this growth are areas such as Discovery Gardens, up 33.5%, The Greens at 33%, and Palm Jumeirah with 30.9% gains. Other neighborhoods, including Al Quoz Fourth and Town Square, posted increases of 29.5% and 28.6%. However, areas like Jumeirah Beach Residence and Dubai Sports City saw slower appreciation, with annual growth rates of 17.6% and 17.8%, respectively.

Prime Property Performance

Dubai’s prime properties are demonstrating an impressive upward trend, especially those with high-value locations, exclusive amenities, and sought-after layouts. The index for prime properties surged by 30.7% annually and 7.3% quarterly, reaching an all-time high of 197.8 points. This growth benchmark, which started at 100 points in the first quarter of 2021, underscores the high demand and limited supply in this segment. Dubai’s real estate market is welcoming an estimated 35,524 new build units by the end of this year. 

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So far, 13,217 apartments and 3,751 villas have been completed within the first nine months, covering around 48% of the annual projection. An estimated 98,253 apartments and 30,272 villas are currently under development, with completion dates projected by 2028. Jumeirah Village Circle holds a significant share of this construction activity, accounting for 11% of the projects, followed closely by Business Bay with 9%, and Jumeirah Lake Towers at 5%. The market for off-plan properties has seen record-high registrations, with 32,968 transactions in the third quarter, representing an impressive 97% year-on-year increase and a 32% quarterly gain. 

These off-plan investments amounted to Dh83.2 billion. Interestingly, the average transaction size of off-plan properties dropped 19.8% year-on-year to Dh2.5 million. In terms of price, the average rate for off-plan properties citywide was Dh19,537 per square meter (or Dh1,815 per square foot). The third quarter saw 12,883 ready secondary home transactions, marking an 11.9% increase quarter-on-quarter and a 19.4% year-on-year rise. 

These sales contributed to Dh29.8 billion in total investments. A significant portion, 41%, of ready home sales were priced below Dh1 million, which underscores a strong demand for affordable properties. However, the average transaction size of ready properties decreased by 9.2% quarterly but remained stable on an annual basis at Dh2.3 million. In the luxury market segment, there were 53 transactions involving homes priced over Dh30 million, slightly lower than the 62 transactions recorded in the same period last year. 

For ready units, the average transaction price was Dh15,414 per square meter (equivalent to Dh1,432 per square foot). This reflects a year-on-year increase of 7.1% but a 5.5% quarterly drop.

Mortgage And Cash Transactions

In the third quarter, there were 10,118 mortgage transactions across all asset types in Dubai, compared to 14,977 cash transactions. The value of mortgage transactions totaled Dh19 billion, while cash transactions amounted to Dh28 billion. This distribution highlights the varied approaches that buyers are taking, with some leveraging financing options and others opting for upfront cash payments. Dubai’s real estate market has seen a notable shift toward more affordable and mid-market apartment options. 

Average apartment sizes have reached their lowest levels, reflecting a focus on compact, budget-friendly properties. Additionally, the average sales price per square foot has softened slightly, giving more buyers access to attractive pricing.

Factors Driving Market Growth

The Dubai real estate market’s progress in the third quarter of 2024 was driven by factors such as record-high population growth and declining interest rates. These dynamics have made it easier for buyers to secure financing and find homes that suit their needs, particularly in the affordable housing sector. This environment has fueled transaction volumes, especially in the ready and off-plan sectors, setting new benchmarks for the city’s property market.

Arshad Darbar’s Thoughts

Arshad Darbar, a seasoned real estate expert with years in the Dubai market, sees the recent developments as a strong indicator of market stability and maturity. He believes the data showing increased property values and a shift towards mid-market affordability highlights Dubai’s adaptability to economic demands and its appeal across diverse buyer segments. The trend of capital values reaching new peaks, especially in villa communities, suggests to Darbar that the market’s resilience and growth potential remain robust. 

He also points out that the significant rise in off-plan transactions shows investor confidence, while the continued strong performance of prime properties reinforces Dubai’s reputation as a global real estate hub. Additionally, Darbar emphasizes the importance of new unit completions to meet growing demand, especially in affordable housing, to ensure sustained growth. Overall, he views these patterns as positive signs, aligning with Dubai’s vision of creating a balanced, sustainable real estate environment that appeals to both local and international investors.

Conclusion

Dubai’s real estate market is displaying signs of growth and maturity. The shift towards sustainable pricing, affordable housing, and increased options across property types indicates a well-rounded market. For investors and residents, the data underscores Dubai’s readiness to support long-term growth, with options that cater to a wide range of budgets and lifestyle preferences.