Record-high prices and aggressive off-plan payment plans by Dubai developers are driving buyers out of central districts and toward properties on the outskirts.
As prices peak in the city’s prime locations, more affordable areas are experiencing significant price growth as buyers and investors shift their focus.
Property prices in Downtown, Business Bay, Palm Jumeirah, Marina, Sheikh Zayed Road, and Dubai Hills Estate have seen consistent single to double-digit quarterly growth during the Covid-19 pandemic due to strong demand from millionaires and high-net-worth individuals relocating to Dubai.
International investors are also purchasing off-plan properties, which are far more affordable compared to global cities like London, New York, Hong Kong, Paris, and Singapore.
Prathyusha Gurrapu, head of research and consultancy at Cushman & Wakefield Core, reported a 20% year-on-year increase in citywide sales prices in Q3 2024, marking 17 consecutive quarters of growth.
Villa prices rose by 23% year-on-year, while apartment rates climbed 19% in the same period.
Suburban and affordable communities are now leading the market, according to Cushman & Wakefield Core data.
“This growth is primarily fueled by lower price points in suburban areas and rising prices in central districts, pushing buyers to invest in outer regions,” Gurrapu stated. Discovery Gardens saw the highest price increase at 43%, followed by Jumeirah Lakes Towers at 34% and Dubailand (Remraam) at 28%, while City Walk and Dubai Hills Estate showed moderate gains of 12%.
Developers in Dubai are introducing increasingly aggressive payment plans to meet growing demand for off-plan properties, with these plans ensuring project completion amid rising construction material costs.
“The sustained demand for off-plan properties has led to payment structures as high as 80/20 or 75/25, making it more difficult for lower-income buyers and families seeking larger apartments or villas,” Asteco, a Dubai-based real estate firm, commented.
Off-plan transactional activity remained strong in Q3, with developments in prime locations and by top developers selling out rapidly due to a combination of brand reputation, prime locations, quality offerings, competitive pricing, and appealing payment plans.
