Dubai Real Estate Navigates Towards a Historic Boom
Allsopp & Allsopp predicts a significant surge in Dubai’s real estate market, possibly the largest in a decade.
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Allsopp & Allsopp, a leading property specialist, provided a comprehensive analysis suggesting that Dubai’s real estate market is on the verge of experiencing its most substantial growth in a decade.
The firm analysis reports a notable increase in sales volume in the first quarter of the year, marking a 19.3% rise compared to the same period in 2023. This uptick surpasses the record-breaking sales volumes of Q4 2023, indicating a market that continues to strengthen.
The analysis by Allsopp & Allsopp reveals a significant trend towards affordability in the real estate market. It highlights that 30% of all properties sold were priced under AED1 million ($272,000), with the majority, 80%, being under the AED3 million ($817,000) threshold. This trend underscores a growing preference for more economically priced properties, coinciding with an increase in finance buyers over cash transactions.
Projections for Dubai’s Real Estate Boom
Dubai’s exit from the Financial Action Task Force FATF “grey list” has significantly influenced investment patterns, boosting the city’s appeal as a financially stable and secure destination for global investors and institutions. This enhanced credibility is expected to drive further investment into Dubai’s real estate sector.
The preference for off-plan properties remains dominant, prompting developers to accelerate the launch of new projects. The current pace sees a new project unveiled every 17 hours, a marked increase from the previous rate.
Key Market Findings
- Apartment sales lead the market with a 13% increase from the previous quarter’s record, highlighting the preference for apartment living.
- Prime residential areas, namely Jumeirah Village Circle, Dubai Marina, and Business Bay, remain the most sought-after locations.
- The sales value split shows apartments making up 61.2%, while villas and townhouses account for 38.8% of total sales.
Lewis Allsopp, Chairman of Allsopp & Allsopp, praised the market’s outstanding performance in Q1, highlighting the surge in sales transactions and the shift towards finance buyers. A record-breaking sale of a luxury villa for AED72 million ($20 million) in Al Barari was a highlight, contributing to a 41% increase in villa and townhouse sales.
With Dubai recently being named the most visited city worldwide and over 25,700 expatriates making it their home in the last quarter, the population growth is poised to further boost the real estate market. Allsopp & Allsopp stand by their prediction that Dubai is on the edge of its most significant boom in 10 years, fueled by ongoing investments and the increasing influx of new residents, marking a new era in Dubai’s real estate history.
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
Americans now think they need at least $1.25 million for retirement, a 20% increase from a year ago, according to a survey by Northwestern Mutual
Villa prices saw particularly strong growth, with capital values increasing by 33.4 percent year-on-year
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Dubai’s real estate market showed strong performance in the second quarter of 2024, with notable increases across the residential, office, and retail sectors, according to a new ValuStrat real estate report for Q2 2024.
Villa prices experienced particularly strong growth, with capital values rising by 33.4 percent year-on-year.
Haider Tuaima, Director and Head of Real Estate Research at ValuStrat said: “The Dubai real estate market has shown impressive growth and resilience in recent months. The ValuStrat Price Index for Residential Capital Values increased by 6.4 percent quarterly and 28.2 percent annually, reaching 178.2 points.
“Despite severe flooding caused by record rainfalls in April, the quick and effective response from developers and authorities helped to control the damage, ensuring that market activity and property valuations remained robust in the subsequent months.”
The office sector also performed well, with the VPI for office capital values surging by 31.7 percent annually and 9.4 percent quarterly, reaching 212.5 points—the highest quarterly increase in a decade.
In the retail sector, Emaar Properties reported 98 percent occupancy in their prime mall assets, while overall mall occupancy stood at 96 percent during the first quarter of 2024. The hospitality sector also saw growth, with total international guests reaching 8.12 million as of May 2024, a 9.9 percent increase compared to the same period last year. Hotel occupancy reached 81 percent, rising by 1.4 percent year-on-year.
Despite these positive indicators, Tuaima added, “The decline in transaction volumes calls for a closer examination of market dynamics as stakeholders navigate this evolving landscape.”
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
Americans now think they need at least $1.25 million for retirement, a 20% increase from a year ago, according to a survey by Northwestern Mutual
