A number of professionals in Dubai Housing point to a healthy change towards slowing down in price increase rather than a declining market trend. After a robust surge in prices climbing at a double-digit speed over the past few years as investors are going towards ready-to-move-in apartments, off-plan property prices in Dubai fell in August.
Though off-plan houses remain the favoured choice for investment in Dubai, people who know the economy think that the decline in prices is not a sign of the weakening of the market but rather going towards a stable price. Data provided by a company shows that, in August 2024, the average price per square foot for off-plan purchases dropped 4.2% to Dh1,666 from Dh1,948 in August 2023.
Driven by an increase in new project launches and supply, which so lowered some pressure on prices, this slowdown shows a normal balancing following the fast price rise of 2023. A company said in a study on Thursday that the market has shown resilience and indications of stability with sustained month-over-month increase as we almost reach the fourth quarter of 2024. Though off-plan pricing are heading lower presently, this does not indicate a declining market; rather, it is a healthy changes towards price slowdown. Professionals noted that one of the main causes of this change is investors' increasing taste for ready-to--move-in homes.
Ten thousand or 66% of all August purchases were off-plan properties, according to Emirates NBD Research. Although over the past few years the general demand and market attitude across the city has improved, the off-plan sector has witnessed the largest increase in transaction volumes. If we look at the property market, more than 69,101 off-plan units have already sold in the year to August 2024 whereas 17,600 off-plan units were sold overall across Dubai in 2018. Emirates NBD predicts over 100,000 off-plan transactions for the whole year at current transaction situations, which is a 468% increase in transaction activity over 2018.
Some professionals think that ready properties accounted for 54% of all purchases in the first quarter of 2024, compared to 46% for off-plan, therefore drastically changing investor priorities for increasing the market for ready-made homes.
Some brokers are also saying that, "buyers are looking more and more for quick returns through rental income or occupancy instead of waiting for construction to be finished." Reflecting the growing demand for ready homes, existing properties also experienced a 30 percent increase in transaction volume in Q1 2024 over the same time in 2023. With a little 5% rise in transaction value, the off-plan market stayed steady, suggesting that although it is still very good, several investors looking for faster returns now pay more attention elsewhere.
The huge number of 2023 launch timetables was another thing somewhat lowering off-plan prices. Pricing policies are being changed to stay in the market given increased developer competition. Some brokers in Dubai also noted that investors are growing increasingly risk-averse and choosing the security of ready-to-move-in residences over the unknowns associated with off-plan projects including market changes or building delays.
This stability of the market is a good thing. Following the unheard-of price increase last year, a time of consolidation and more moderate development is both expected and good. Although the huge demand in 2023 raised prices, the market is currently starting a flat situation between supply and demand. While still providing chances for developers and investors, this move towards ready residences helps to normalise off-plan prices.
For two years the property market of Dubai is seeing the rise of demands for luxurious properties but for a few months people are now attracted towards ready-to-move properties. This shows that the customers who are looking for a house in Dubai are ready to pay more but they want to get a property to live there quickly. The price of the properties are also increasing because of the world-class facilities and modern services that are being provided with the properties.
