Revealed: Dubai Off-plan properties prices to surge 15% in second half of 2024
The Dubai real estate market is poised for a significant surge in residential property prices within the off-plan segment, with projections indicating up to a 15 percent increase in the second half of 2024. This surge is driven by rising construction costs and sustained demand from overseas investors, according to industry experts.
Competition from Abu Dhabi and Ras Al Khaimah
In addition to Dubai, property prices in Abu Dhabi and Ras Al Khaimah (RAK) are also set to see substantial increases. High-end properties in RAK, in particular, are predicted to experience up to a 50 percent jump leading up to the opening of a new casino.
Factors Driving Price Increases
Construction costs in the UAE have risen by 2-3 percent in recent months due to global supply chain issues, economic instability, and geopolitical events. These factors are driving international investors to the UAE market, further increasing demand.
Industry Insights
Founder and CEO of Sunrise Capital, noted that the off-plan property market is expected to witness a 10-15 percent price increase due to soaring demand. Chairman and Managing Director of Acube Developments, echoed this sentiment, predicting a 15 percent price hike in the latter half of the year amid the ongoing real estate boom in Dubai.
Impact of Regulatory Changes
Despite a dip in transactional volumes in Dubai’s residential real estate sector in June, off-plan sales saw a significant 33 percent increase. This jump is partly attributed to stricter regulations by the Dubai Land Department (DLD), which require developers to place investors’ funds in escrow accounts accessible only for project-specific expenses. This regulation aims to minimize project delays and ensure financial transparency, boosting the appeal of off-plan investments.
Rising Competition from Abu Dhabi and RAK
Industry experts highlight that the real estate markets in Abu Dhabi and RAK are set to provide strong competition to Dubai, driven by increased demand from international investors and rising construction costs. According to ValuStrat, affordable apartments and villas in Abu Dhabi have seen significant price increases, with apartments rising by up to 10 percent and villas by over 6 percent in June. Luxury housing in Abu Dhabi has also seen price rises, particularly in waterfront developments like Al Reem Island, Al Raha Beach, and Yas Island.
Ras Al Khaimah’s Market Surge
Ras Al Khaimah’s property market is expected to see a surge in prices, with frequent property launches pushing prices higher in each new phase. The residential market in RAK has witnessed a 20-25 percent increase in prices over the past eight months, and prices are projected to rise by as much as 50 percent by the time the casino opens.
Changing Trends in Dubai’s Real Estate Market
Dubai’s residential real estate segment is experiencing significant trend changes, with buyers increasingly preferring integrated communities and smart home technologies. noted a growing desire among buyers for properties in fully integrated communities with access to great amenities. Additionally, environmentally conscious buyers are seeking properties equipped with smart home technologies and eco-friendly features.
Increased Demand for Townhouses and Villas
There has been a recent uptick in demand for townhouses and villas, despite a lack of supply. This is attributed to more people putting down roots in Dubai for the long term. Areas like Dubai South, Jumeirah Village Circle (JVC), Furjan, and locations along the newly announced metro blue line are performing well due to the availability of larger properties with bigger plots.
Demographic Trends
The Dubai market has seen interesting demographic trend changes recently, with British investors overtaking Indians in flocking to the UAE for Golden Visas, tax-free benefits, high rental yields, and the emirate’s unparalleled standard of living.
The Dubai real estate market, particularly the off-plan segment, is set for a significant price surge in the second half of 2024, driven by rising construction costs and increased demand from international investors. While facing competition from emerging markets in Abu Dhabi and RAK, Dubai continues to attract investors with its regulatory transparency, integrated communities, and advanced smart home technologies.
Reference: Arabian Business
