The Dubai real estate market is experiencing an unprecedented boom in off-plan property sales. Experts reveal which areas performed the best in Q2 signalling promising investment opportunities.
The Dubai real estate sector witnessed a remarkable increase in off-plan market sales during Q2 2024, according to a new report by property specialist Haus & Haus.
Off-plan transactions comprised 63 percent of total property sales, showcasing a robust demand for new developments.
Despite only a five percent growth in the number of launched units, transactions soared by 212 percent year-on-year.
Top performing areas for off-plan investment
Jumeirah Village Circle
Jumeirah Village Circle (JVC) continues to be a hotspot for off-plan investments, ranking first for the number of transactions for the fourth consecutive quarter. In Q2 2024, JVC recorded 3,102 transactions, totalling $805 million (AED 2.95 billion) in sales value.
According to Bayut’s Dubai sales market report H1 2024, the family-friendly neighbourhood saw price per square foot surge between five and 12 percent, compared to the same period last year.
Their data shows District 10 in Jumeirah Village Circle emerged as the top off-plan investment opportunity, offering off-plan apartments priced between AED 250,000 and AED 2.6 million.
While JVC has seen property prices more than double in recent years, the neighbourhood is set to receive approximately 30,000 new residential units, equivalent to 80 percent of its current housing stock, according to Real Trust. This surge in stock could bring more balance into the area’s market dynamics.
Mohammed Bin Rashid City (MBR City)
The off-plan market in the exclusive district of Mohammed Bin Rashid City (MBR City) reported 1,998 transactions totalling $664 million (AED 2.4 billion), marking significant growth compared to 2023 according to Haus & Haus.
MBR City is expected to deliver 19,845 units by 2028, including notable projects such as The Crest at Sobha Hartland as well as the luxurious development by Prestige One, The Waterway which was announced last quarter.
During the second quarter of 2024, neighbourhoods including Sobha Hartland and Dubai Hills Estate showed a steady rise in sales price per square foot, with one and two-bedroom homes accounting for the highest number of transactions. According to Haus&Haus, average prices in these neighbourhoods increased by 15 and 17 percent respectively, compared to the same period last year.
Popular areas such as District One, District 11 and District 7 continue to show strong off-plan opportunities, with an average return on investment ranging between 7.45 percent and 48.9 percent.
Business Bay
Business Bay, known for its high demand and escalating prices, recorded 1,863 transactions with a total sales value amounting to $1.4 billion (AED 4.8 billion). Average gross investment yields held strong at 7.8 percent and has remained reassuringly steady for the past 12 months.
Among the top-performing off-plan projects, Jumeirah Living Business Bay and Bayz 101 attracted significant interest from luxury buyers. The affluent community is set to see an addition of around 20,000 new residential units in the coming years.
Dubai South
Dubai South has become a popular hotspot due to the recent announcement of the Al Maktoum International Airport expansion plans.
Last quarter, the area launched several new townhouse and villa communities, resulting in a 75 percent growth in townhouse sales and a 360 percent growth in villa sales year on year. Despite this, apartment sales still dominated with 91 percent of sales. In coming years, Dubai South will have an additional 14,000 new residential units added, according to recent reports.
Off-plan future outlook
Dubai’s off-plan market is witnessing significant growth, with over 52,000 units expected to be completed this year and 78,361 new units launched so far this year. With 297,000 residential units currently under construction, the market is showing no signs of slowing down.
However, despite the positive growth, some property experts have raised concerns about the impact of the influx of new units on market dynamics and residential property prices over the medium term.
According to the latest Q2 2024 Dubai Residential Real Estate Market Report by Real Trust UAE, the median off-plan sales price in Q2 was $419,000 (AED 1.54 million), representing a 0.6 percent decline from Q1 and the second consecutive quarter decline.
The report also highlighted that individual sellers in off-plan projects are struggling to sell at opening prices, with many opting to take a loss instead of paying the next developer payment they cannot afford.
Despite these challenges, there is still a healthy demand among investors for off-plan properties. Earlier this spring, the ValuStrat Price Index, Dubai Residential Capital Values’ revealed a significant 76.3 percent year-on-year increase for off-plan residential registrations, indicating that investors are still confident in the long-term potential of the market.
For a detailed perspective on the property market, visit: Dubai - VPI Residential Capital Values - June 2024
