Dubai real estate sector has witnessed a significant surge in supply, with 10,000 new properties entering the market in Q1 2024, according to Asteco’s latest report. Despite this increase, the market remains resilient, showing strong signs of progress.
Dubai Real Estate Resilience
Dubai’s robust economic performance and dedication to improving living standards continue to draw a considerable number of expatriates. The city’s commitment to attracting skilled professionals is a testament to its resilience and progress in 2024.
Supply in Dubai Real Estate
The first quarter of 2024 saw the introduction of over 10,000 residential units in the Dubai market, including 7,300 apartments and 2,750 villas. This significant increase from the previous quarter sets an optimistic path for the rest of the year. By the end of 2024, an additional 30,000 units are expected to be added to the market.
Rental Rate Growth
The past three months have seen a mixed trend in rental rate growth. While the average rental rates for apartments and villas have remained relatively stable, the growth rates have varied across different communities. On an annual basis, growth rates have slowed to single digits, with villas at 6% and apartments trailing closely at 10%.
Contracts and Renewals
Data from the Dubai Land Department (DLD) shows a 4% decrease in the number of new contracts issued in Q1 2024 compared to both the previous quarter and the same period last year. Conversely, the volume of renewals increased by 5% quarter-on-quarter and 12% year-on-year, with many tenants agreeing to above-average rental increases.
Buyer Preferences
The new year saw a gradual shift in buyer preferences, with apartments in established communities such as Jumeirah Village Circle (JVC), Business Bay, Dubai Marina, and Downtown Dubai gaining increased popularity. Apartments typically offer a higher Return on Investment (ROI), due to factors such as lower initial investment costs, greater rental demand, higher occupancy rates, and shorter vacancy periods.
