• Data suggests the secondary market is levelling out, particularly in properties valued in the AED 10 million+ price bracket to a more sustainable level of activity after five years of exorbitant growth
  • While rental prices continue to soar and mortgage products become more affordable, more tenants are pivoting to homeownership

Dubai, United Arab Emirates: A Q1 market overview report published by Espace Real Estate has analysed sales and rental activity across the villa, townhouse, and apartment market in Dubai during the first three months of 2024.

Tracking 30 communities and concentrating solely on the residential sector, the report shows a strong start to the year for the award-winning real estate agency which has been operating in Dubai for 15 years.

Q1 KEY HIGHLIGHTS:

Sales Market

With a significant increase in total sales transaction value (+26%) and transaction volume (+22%) in both the off plan and secondary markets, compared to this time last year, there is optimism when it comes to the rest of 2024.

However, despite the strong 12-month growth rate, when compared to the previous quarter (Q4 2023), there is evidence to suggest that the secondary market is finally levelling out to a more realistic and sustainable level of activity, with an 11% decrease in transaction values compared to the previous quarter (Q4 2023).  This is the result of fewer properties transacting above the AED10M price point on a Quarter on Quarter (QoQ) basis when compared to what was a hugely buoyant Q4 2023. In contrast to this, the sub AED10M price bracket continues to experience transaction volume growth on a QoQ basis.

John Lyons, Managing Director, Espace Real Estate explains: “While there is an overall increase in activity, the secondary market is showing signs, particularly in the AED10million+ price point, that it will not continue to accelerate on the same trajectory as it has been. Quarter on quarter data tells us things are going to stabilise and the secondary market will continue to transact, but at levels that will likely see more modest levels of market growth than the steep upward trajectory we have seen over the past five years. In other words, the more expensive end of the market is flattening out.”

At a community specific level, average prices have increased in all 30 communities tracked in the report, except for Emaar Beachfront and Jumeirah Golf Estates. The communities with the highest average sale price during Q1 were Jumeirah Islands (49%), The Lakes (44%) and Jumeirah Park (44%).

So, is Jumeirah Golf Estates losing value or levelling out? John Lyons explains: “It is important to note that Jumeirah Golf Estates has not experienced a decline in value. In fact, there has been a surge in transaction activity for the lower price point townhouse sector which represents 44% of total transaction volume in JGE in Q1 2024, up from 13% in 2023. To put it simply, there has been an influx of new townhouse transactions in the community, which has brought the average sales price data down.”

“Then, if we look at the case of Jumeirah Park which shows a 44% increase in value, although a reduction in volume, we can put this down to the price gap narrowing with comparable local communities such as The Meadows which in Q1 2023 was 20% more than Jumeirah Park, but in Q1 2024 is just 11% more.”

Report data also shows that there has been an 8% decrease in price reductions when compared to the same period last year, which shows that price ambition levels are still high, with positive sentiment among with sellers.

In terms of buyer nationalities, the United Kingdom and India continue to top the list for Espace Real Estate, while Russia no longer features in the top ten in stark contrast to Q1 2023. Lebanon now ranks third in the list of buyer nationalities with the Netherlands and Canada coming in at fourth and fifth respectively.

John Lyons explains the effect on the secondary market when new developments in established communities enter the market. “If we look at Palm Jumeirah, for example, there has been a -53% decrease in the number of transactions in the secondary villa/townhouse market (albeit average prices are +14% higher). This is because, as the area sees more developers launching brand new collections of villas and townhouses on to the market, more people are buying off plan rather than going for older builds. For the coming months I would anticipate that as the off-plan market continues to make lots of great options available, we are going to see slightly more sustainable levels of activity in the secondary market.”

RENTAL MARKET

Average rental prices continued to soar across every community tracked, with significant uplifts year on year in Palm Jumeirah’s villa/townhouses (+63% YoY) and in Bluewaters Island apartments (+64%). Popular areas for villa/townhouse living have also experiened an uplift in rent prices such as The Meadows (+35%), Dubai Hills (+36%) and Jumeirah Islands (+29%).  

However, there has been a decrease across most communities in new rental contracts and renewals, and the number of transactions is down. 

John Lyons, Managing Director, Espace Real Estate explains: “At Espace Real Estate we have seen a trend of tenants becoming homeowners over the last 12 months due to very high rental prices and a more affordable mortgage market. When people are faced with the decision whether to renew their contract, they are looking at the exorbitant cost of rent versus the cost of ownership. Mortgage products are much lower than they once were and there are also relaxed visa regulations making it easier for people to buy their own home. With the population conrtinuing to grow and many people setting up home in the region, we have seen signficant increases in mortgage leads and buyer registrations over the last quarter.”

Download the full report here.

-Ends-

For all media enquiries, please contact:
Maryanne Peacock
maryanne@thecommsclubdxb.com

About Espace Real Estate

Established in 2009 in the United Arab Emirates, Espace Real Estate is one of Dubai’s leading property brokerages providing a full suite of property-related services across residential sales & leasing, mortgage services, property management, and short-term holiday rentals. 

The award-winning property brokerage offers a wealth of experience, tailoring world-class services that offer added value in fulfilling the property needs of both residents and investors in Dubai. 

Espace Real Estate, with its leading market share in many of Dubai’s most well-known communities, manages middle to upscale and ultra-luxury properties, well-suited for families living in Dubai across more than 55 communities.

Having organically grown to a team of cira 200 employees, Espace Real Estate has established itself as a well-respected and well-known market-leading brokerage. Built on the values of transparency and knowledge the team is managed under a British style of leadership with 7 different nationalities sitting on the senior management team. Espace Real Estate is a several-time winner of Property Finder’s Best Quality brokerage award and has attained several awards from Bayut. Winning the Dubai Land Department award in recognition as one of the most transacting real estate brokerages in Dubai 2023 is one of the biggest highlights for Espace to date.