Prices in high-demand locations such as Dubai Hills Estate, Business Bay, and Jumeirah Village Circle surged by 15-30% compared to the previous year, the report said
Dubai’s real estate market has entered a period of stabilisation following significant price increases in off-plan properties during 2023, according to a report by Betterhomes.
The market witnessed a spike in off-plan property prices over the last year, driven by high demand and limited supply in key areas.
Prices in high-demand locations such as Dubai Hills Estate, Business Bay, and Jumeirah Village Circle surged by 15-30 per cent compared to the previous year.
Investors shift focus to ready properties in Dubai
Popular luxury developments in Downtown Dubai and Palm Jumeirah also saw sharp increases, as investors sought to capitalise on potential capital appreciation during construction, the report said.
Betterhomes observed this surge firsthand, reporting increased activity as investors flocked to the booming market, attracted by Dubai’s strong economy and thriving real estate sector.
Recent data shows a slight decline in average prices. The average price per square foot for off-plan sales in August 2024 reached AED1,866, a 4.2 per cent decline from AED1,948 in August 2023.
This moderation reflects a natural balancing after the rapid price growth of 2023, driven by an increase in new project launches and supply, which eased some pressure on prices.
As 2024 approaches its final quarter, the market has shown resilience and signs of stabilisation with consistent month-over-month growth, the report said, adding that the current trend of lower off-plan prices doesn’t signal a weakening market, but rather a healthy recalibration towards price equilibrium.
One of the primary reasons behind this shift is the growing preference among investors for ready-to-move-in properties.
In Q1 2024, ready properties accounted for 54 per cent of all transactions, compared to 46 per cent for off-plan, marking a significant shift in investor priorities.
Buyers are increasingly looking for immediate returns through rental income or occupancy rather than waiting for construction to be completed.
Existing properties saw a 30 per cent increase in transaction volume in Q1 2024 compared to the same period in 2023, reflecting the rising demand for ready homes.
Meanwhile, the off-plan market maintained stability with a modest 5 per cent increase in transaction value, indicating that while still appealing, it is no longer the primary focus for many investors seeking quicker returns.
The supply of new developments, particularly after the aggressive launch schedule of 2023, has also contributed to the slight dip in off-plan prices.
With more competition among developers, pricing strategies are being adjusted to remain competitive. Investors are becoming more risk-averse, favouring the security of ready-to-move-in properties over the uncertainties that can come with off-plan projects, such as construction delays or market shifts.
“At Betterhomes, we continue to track these market dynamics closely. Our strategy for 2024 focuses on helping investors navigate both the off-plan and ready property segments by offering expert guidance on where the best opportunities lie. Whether it’s in emerging off-plan developments or established ready homes offering immediate returns, we’re positioned to provide valuable insight and support,” the report said.
Courtesy of Arabian Business
