In-Demand and ‘Rightly-Priced’: Ready Properties in Dubai Selling Within a Month
Monday, 26 August 2024
The Dubai real estate market is currently experiencing robust demand for ready-to-move-in properties. Despite the off-plan segment leading the market rally, well-priced ready properties are selling rapidly, often within a month of listing.
Key Drivers of Demand
- High Net-Worth Individuals (HNWIs): The market is buoyed by both residents and HNWIs seeking immediate occupancy.
- Supply Shortage: A significant supply shortage is fuelling this demand, as more end-users are moving into the city due to increasing rental rates.
Market Insights
- Resident Influx: Dubai is welcoming over 8,000 new residents monthly. This rising population is intensifying demand, outstripping supply in many new projects, leading to swift sales of appropriately priced ready properties.
- Quote from Provident Estate: “Ready properties correctly priced are selling within a maximum of four weeks of being on the market.”
- Transaction Trends:
- Engel & Volkers Middle East: “Demand for ready properties in 2024 remains high. However, due to limited stock, growth has predominantly been in the off-plan segment, with a notable 13.2% increase in ready property transactions year-on-year.”
- Price Growth:
- The first half of 2024 saw a 14.57% increase in ready property prices compared to the same period the previous year.
Population Growth and Real Estate Demand
- Increasing Population: Dubai’s population grew from 3.66 million at the start of 2024 to 3.754 million by August 1. The city is on track to meet its 2040 population target of over 5.5 million, assuming the current growth trend continues.
- End-User Market Trends:
- Local and International Buyers: Most purchasers of ready-to-move-in properties are either locals or investors looking to use these properties for personal use. High rental prices are pushing more end-users and millionaires towards purchasing real estate.
- Wealth Statistics: According to Henley Partners and New World Wealth’s 2024 report, Dubai has 72,500 individuals with liquid assets worth $1 million or more, an increase of 78 from 2013 to 2023.
Market Dynamics
- Luxury Real Estate Appeal:
- The Dubai real estate market continues to thrive, with record sales across various sectors. Villa and townhouse prices have risen due to low supply, and luxury properties remain attractive to HNWIs and investors.
- Provident Estate Insight: “The end-user market has seen significant growth since 2020, driven by the stability of the Emirate and high demand for premium real estate opportunities.”
- Rental Yields and Price Appreciation:
- Dubai’s Advantage: The average rental yield in Dubai ranges between 6-8%, compared to 2-3% in London and Hong Kong, and 3-4% in New York.
- Price Trends: Dubai experienced an 18% increase in property prices in just one year (2022-2023), while the average price appreciation in London, Hong Kong, and New York over five years ranged from 10-20%.
