There are currently more than 297,000 residential units currently under construction in Dubai, representing 55 percent of the total existing residential property supply, a new report found.
This substantial pipeline of new units is set to significantly influence market dynamics in the coming years, according to the latest Q2 2024 Dubai Residential Real Estate Market Report by Real Trust UAE.
Popular residential areas that have experienced soaring prices due to high demand and limited inventory are poised for substantial changes. Jumeirah Village Circle (JVC), where prices have more than doubled in recent years, is set to receive approximately 30,000 new residential units, according to Real Trust, equivalent to 80 percent of its current housing stock. This surge in stock could bring more balance into the area’s market dynamics.
Similarly, Business Bay, known for its high demand and escalating prices, will see an addition of around 20,000 new residential units.
An emerging hotspot bolstered by the announcement of a new airport, Dubai South, is slated for 14,000 new homes in the coming years.
Today, we approved the designs for the new passenger terminals at Al Maktoum International Airport, and commencing construction of the building at a cost of AED 128 billion as part of Dubai Aviation Corporation's strategy.
— HH Sheikh Mohammed (@HHShkMohd) April 28, 2024
Al Maktoum International Airport will enjoy the… pic.twitter.com/oG973DGRYX
These significant additions to the housing supply across key areas are likely to impact market positioning and alter supply-demand dynamics, potentially leading to price adjustments in both sales and rental markets over the next few years, Real Trust believes.
Dubai Real Estate Market Insights Q2 2024
The report further highlighted several key indicators of a shifting market landscape during the second quarter of 2024. Since September last year, the median residential listing price value has been declining month-on-month by an average of 5 percent, signalling a transition from a seller’s market to a buyer’s market. Additionally, the average days on market for a sale listing increased from 30 days last year to over 90 days.
The secondary/ready market is showing signs of slowdown, with a 2.9 percent decline quarter-on-quarter in residential sales transaction volume in Q2. This marks the second consecutive quarter of decline in this segment. However, the media sales price for residential secondary transactions in Q2 was AED1.4 million, showing a 5 percent increase from Q1.
The off-plan market remains active, with 78,361 new units launched in 2024 so far. Off-plan sales transactions in Q2 increased by 18 percent quarter-on-quarter and 64 percent year-on-year. However, the median off-plan sales price in Q2 was AED1.54 million, representing a marginal 0.6 percent decline from Q1 and the second consecutive quarter decline.
Real estate developers are adapting to the changing market conditions by offering more competitive products through incentives, discounts, and extended post-handover payment plans. Of the newly launched projects this year, 34 percent feature post-handover payment plans, ranging from 12 to 120 months.
Lynnette Sacchetto, Founder of RealTrust and a respected voice in Dubai’s real estate sector, notes.
As Dubai’s population continues to grow, with 25,776 new residents in Q1 2024 bringing the total to 3,680,785, the real estate market is expected to continue evolving.
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