Although the off-plan segment is leading the Dubai property market rally, demand for ready properties also stays strong as ‘rightly-priced’ units are sold within a month of putting it up for sale.
Driven by the demand from high net-worth individuals or millionaires and residents, the ready property market is also facing a supply shortage as end-users are growing in the city due to rising rentals.
“Dubai is getting an additional 8,000 plus residents per month, the demand outweighs supply in the majority of projects being launched and sold out and ready properties correctly priced are selling with a maximum of four weeks of being on the market,” Provident Estate said.
“Property demand in 2024 so far was high for ready properties, but due to the lack of stock, we have seen the majority of growth coming from the off-plan segment. There has been a 13.2 per cent increase in ready property transactions yearly,” said Engel & Völkers Middle East.
It said ready property prices increased by 14.57 per cent in the first half of 2024 compared to the same period last year.
Growing end-users
Dubai is on track to hit the 2040 plan of population growth with an increase of residents from 3.66 million at the beginning of 2024 to 3.754 million on August 1. If the population increases at the current steady rate, it will reach just over 5.5 million by 2040.
Industry executives suggest that most buyers – either end users or millionaires relocating to Dubai – of the ready property are residents or investors who want to use these properties for personal purposes amidst high rents.
According to the World’s Wealthiest Cities Report 2024 from Henley Partners and New World Wealth, the number of individuals in Dubai with liquid investment wealth or assets that can be readily converted to cash of $1 million or more increased by 78 between 2013 and 2023 to 72,500.
“The Dubai real estate market has seen continuous growth with record sales across all sectors. Notably, the end-user market which increased from 2020 due to the stability of the Emirate, has seen villa/townhouse prices increase due to low supply. Luxury properties in Dubai continue to attract high net worth individuals and investors looking for premium real estate opportunities,” Provident Estate said.
Dubai’s property market’s current average rental yield is around 6-8 per cent compared to 2-3 per cent in London and Hong Kong and 3-4 per cent in New York. While average property price appreciation in the above three cities was between 10 to 20 per cent in the 5 years while Dubai saw an 18 per cent rise in just a year during 2022-2023.