Three new master communities are set to make their debut in Dubai in 2024, contributing to the much-needed supply of villas and townhouses on the market and marking the beginning of the emirate’s next phase of expansion, despite off-plan sales continuing to dominate the market.
According to a reliable source of real estate market intelligence, Property Monitor, two of the upcoming master communities are The Heights Country Club and Grand Club Resort. Damac’s third community is scheduled to debut in May.
“These projects, all situated in southwest areas of Dubai along the E611 corridor, are poised to increase the supply of villas and townhouses in the market and initiate the emirate’s next phase of expansion,” Property Monitor stated in its report.
Based on initial data, approximately 10,000 new off-plan project launches occurred in February, with the majority of these launches being for apartments. Single-family home launches, including villas and townhouses, accounted for about 15% of all new units introduced to the market during the current cycle. This segment of the market is still under-supplied, but this situation may soon change.
Dubai real estate prices experienced a modest trajectory in February, with a recorded monthly gain of 0.83 percent. This aligns with our prediction of an overall slowdown in price appreciation, with annual gains expected to range between 5-8 percent. This follows a meager 0.2 percent increase in prices last month.
As per the Property Monitor Dynamic Price Index (DPI), property prices in Dubai currently stand at Dh1,294 per square foot, slightly below 5.0 percent above the previous all-time high and market peak of September 2014.
“While price appreciation remains subdued, the monthly volume of sales transactions continues to increase, rising by 2.6 percent in February, reaching a total of 11,913 sales, the highest volume ever recorded for the month of February. This new record surpasses last year’s by a significant 30.4 percent,” the report stated.
Residential transactions, comprising townhouses, apartments, and villas, accounted for the majority of sales at 92.1 percent (10,966 transactions). Land sales (1.7%), hotel apartments (2.8%), and office spaces (2.2%) were the most frequently traded categories of commercial real estate.
The report attributes the consistently high sales volume to the seemingly insatiable demand for off-plan properties, with the apartment segment witnessing the strongest growth in sales volumes. Despite this, demand for villas and townhouses has not increased, primarily due to supply limitations rather than a lack of buyer demand.
“In January, a total of 6,384 off-plan Oqood transactions were registered, representing a slight 0.5 percent decrease in volume compared to the previous month. Title Deed sale volumes increased by 6.3 percent, now accounting for 46.4 percent of all sales transactions. While Oqood transactions are typically used to gauge the off-plan market, several villa and townhouse sales are recorded in the Dubai Land Department data as being issued with Title Deeds and as completed properties—rather than being under construction and sold off-plan,” the report explained.
Off-plan transactions hold a significant market share of 59.8%, falling exactly in the middle of the long-term distribution between the off-plan and existing sales segments. Reselling transactions, however—additional property sales after the developer’s initial sale for an unfinished or off-plan project—remained steady at 4,970 in February. First developer sales maintained their dominant market share of 58.3%, up just 0.1% from the previous month, indicating a relatively stable market share of 41.7%.
The number of mortgage transactions decreased by less than 5% in February, totaling 2,868 loans. The percentage of loans taken out for new purchase money mortgages increased by 6.3% from the previous month to 46.1%. The average amount borrowed was Dh1.77 million, with a loan-to-value ratio of 75.6%. The market share of loans intended for equity release and refinancing decreased by 0.3% to 37.6%. The remaining 16.3%, a decrease of 6.0% from the previous month, was attributed to mortgages taken out by larger investors and developers who owned several units.
