Dubai is set to witness the handover of 38,174 new residential units this year, reflecting the ongoing strength in its real estate sector, as outlined in a recent report by ValuStrat.

By the end of the first half of 2024, around 6,939 apartments and 2,145 villas had already been completed, which constitutes 20% of the total projected handovers for the year.

Key completions in the apartment segment during the second quarter included Creek Views 1 and 2, offering 634 and 587 units, respectively. In the villa category, significant completions were recorded at Murroj Al Furjan West with 161 units and Silver Springs 3 in Damac Hills with 258 villas.

Looking ahead, Dubai has around 91,718 apartments and 28,385 villas currently under development, with expected completions by 2028, according to ValuStrat’s estimates. Jumeirah Village Circle and Business Bay each account for 10% of these projects, with Jumeirah Lakes Towers following at 5%.

Haider Tuaima, the director and head of real estate research at ValuStrat, highlighted the continuous growth in demand driving the market. He noted that the upward trend in valuations and rents across various segments indicates that the market is in its growth phase. As the market evolves, it will be crucial to closely monitor these trends and adapt strategies to maximise investment returns.

The UAE’s real estate sector has seen a significant boost due to various government initiatives, including extended residency options for retirees and remote workers, and the expansion of the 10-year golden visa scheme. These factors, coupled with the broader economic diversification efforts, have bolstered the property market.

Dubai’s luxury market reached new heights last year, with sales of homes valued at over $10 million nearly doubling to $7.6 billion, surpassing even London and New York, as reported by Knight Frank.

The villa segment of Dubai’s real estate market remains particularly strong, with capital values showing a 33.4% annual increase and a 7.3% rise on a quarterly basis. Leading performers in this category included Palm Jumeirah, Jumeirah Islands, Dubai Hills Estate, and Emirates Hills.

Apartment valuations also maintained an upward trajectory, with a 5.4% quarterly increase and a 23.4% annual rise. Noteworthy areas showing strong performance included Discovery Gardens, The Greens, Palm Jumeirah, The Views, Al Quoz Fourth, Town Square, and Dubailand Residence Complex. Remarkably, Palm Jumeirah has become the first location where apartment prices have surpassed their previous peaks from 2014.

Despite heavy rainfall and subsequent flooding in April, property valuations remained largely unaffected in the months that followed. Tuaima noted that the swift response from developers and authorities mitigated the impact on affected communities.

In the second quarter, the Dubai real estate market saw 7,921 mortgage transactions across all asset classes, compared to 13,834 cash transactions for ready properties. The value of these mortgage transactions amounted to AED 26 billion, while cash transactions totalled AED 35 billion.

Transactions in the off-plan segment surged by 61.4% annually and 19.1% quarterly, representing investments worth AED 59.9 billion. Leading locations for off-plan transactions included Jumeirah Village Circle, Business Bay, and Meydan One.

Q2 also recorded 11,508 transactions of ready secondary homes, reflecting a 1.7% quarterly decrease but a 4.8% annual increase, with investments totalling AED 29.3 billion. Notably, 37% of these sales were for homes priced under AED 1 million, down from 40.8% in the previous year.

There were 55 sales of homes valued at over AED 30 million during this period, slightly down from 63 in the same period last year. The most active areas for ready property transactions were Jumeirah Village Circle, Business Bay, and Dubai Marina.

In terms of rentals, Dubai’s residential rental values saw a 2.7% quarterly increase and a 10.8% rise on an annual basis. Villa rents grew by 1.1% quarterly and 3.5% annually, averaging AED 408,200 per year. Apartment rents increased by 16.9% annually and 3.8% quarterly, reaching an average of AED 89,100.

The report also detailed the average asking rents for different apartment configurations, with studios renting for AED 59,000 annually, 1-bedroom units for AED 86,000, 2-bedroom units for AED 123,000, and 3-bedroom units for AED 193,000. For villas, 3-bedroom units averaged AED 321,000, 4-bedroom units AED 401,000, and 5-bedroom units AED 503,000.

Original article reference: The National News.