Dubai real estate: Top off-plan investment areas revealed by property experts
The Dubai real estate market is experiencing a significant surge in off-plan property sales, with a recent report by property specialist Haus & Haus highlighting the top-performing areas in Q2 2024. Off-plan transactions made up 63 percent of total property sales, showing robust demand for new developments. Despite only a five percent increase in launched units, transactions soared by 212 percent year-on-year.
Top Performing Areas for Off-Plan Investment
Jumeirah Village Circle (JVC)
Jumeirah Village Circle (JVC) continues to lead the market for off-plan investments, ranking first for the number of transactions for the fourth consecutive quarter. In Q2 2024, JVC recorded 3,102 transactions, totaling $805 million (AED 2.95 billion) in sales value. According to Bayut’s Dubai sales market report for H1 2024, the price per square foot in this family-friendly neighborhood surged between five and 12 percent compared to the same period last year. District 10 in JVC emerged as a top off-plan investment opportunity, with apartments priced between AED 250,000 and AED 2.6 million. With approximately 30,000 new residential units expected, JVC is set to balance its market dynamics.
Mohammed Bin Rashid City (MBR City)
The exclusive district of Mohammed Bin Rashid City (MBR City) saw significant growth, with 1,998 transactions totaling $664 million (AED 2.4 billion) in Q2 2024. MBR City is set to deliver 19,845 units by 2028, including notable projects such as The Crest at Sobha Hartland and The Waterway by Prestige One. Neighborhoods like Sobha Hartland and Dubai Hills Estate showed a steady rise in sales price per square foot, with one and two-bedroom homes accounting for the highest number of transactions. District One, District 11, and District 7 continue to offer strong off-plan opportunities, with average returns on investment ranging between 7.45 percent and 48.9 percent.
Business Bay
Business Bay, known for its high demand and escalating prices, recorded 1,863 transactions with a total sales value of $1.4 billion (AED 4.8 billion). Average gross investment yields remained steady at 7.8 percent over the past 12 months. Top-performing off-plan projects like Jumeirah Living Business Bay and Bayz 101 attracted significant interest from luxury buyers. The area is set to see an addition of around 20,000 new residential units in the coming years.
Dubai South
Dubai South has become a popular hotspot due to the recent expansion plans for Al Maktoum International Airport. The area launched several new townhouse and villa communities last quarter, resulting in a 75 percent growth in townhouse sales and a 360 percent growth in villa sales year-on-year. Despite this, apartment sales still dominated with 91 percent of sales. Dubai South is expected to add 14,000 new residential units in the coming years.
Off-Plan Future Outlook
Dubai’s off-plan market is witnessing significant growth, with over 52,000 units expected to be completed this year and 78,361 new units launched so far in 2024. With 297,000 residential units currently under construction, the market shows no signs of slowing down. However, some property experts have raised concerns about the impact of the influx of new units on market dynamics and residential property prices over the medium term. The latest Q2 2024 Dubai Residential Real Estate Market Report by Real Trust UAE indicated a median off-plan sales price of $419,000 (AED 1.54 million), representing a 0.6 percent decline from Q1 and marking the second consecutive quarter of decline. Individual sellers in off-plan projects are struggling to sell at opening prices, with many opting to take a loss instead of paying the next developer payment they cannot afford. Despite these challenges, there remains healthy demand among investors for off-plan properties. Earlier this spring, the ValuStrat Price Index, Dubai Residential Capital Values revealed a significant 76.3 percent year-on-year increase for off-plan residential registrations, indicating continued investor confidence in the long-term potential of the market.
Reference: Arabian Business
