In August, Dubai property price growth experienced its second highest monthly gain of the current market cycle with a monthly gain of 2.48% recorded. This is more than double the rate of growth compared to last month (1.22%) as well as the average monthly growth experienced year-to-date (1.24%). A large driver behind this surge is directly related to the sheer volume of new off-plan project sales in communities that previously had few new launches or where new launches, and ready property sales were typically balanced. It’s important to note that while the index in these communities is being driven higher, not all properties in the communities are increasing at the same rate with older units seeing more moderate gains when viewed in isolation to their new construction counterparts.
According to the Property Monitor Dynamic Price Index (DPI), Dubai property prices grew by 2.48% in August and currently stand at AED 1,431 per square foot, 16% over the previous all-time high and market peak of September 2014. This brings the overall growth of the current market up swing to 56.8% and marks the forty-sixth month since prices bottomed out in late 2020.
The total volume of sales transactions witnessed a minor increase of 0.28% in August reaching a total of 16,145 transactions marking not only the highest-ever August volume but also the second-highest month on record overall. This continues the trend of record setting months, in fact every month in 2024 with the exception of April, has achieved its highest-ever transaction volumes for the respective month. Residential transactions, encompassing apartments, townhouses, and villas, accounted for the majority of sales at 93.9% (15,160 transactions). The highest transacted commercial property types were office spaces (1.7%), vacant land (1.6%), and hotel apartments (1.4%).
In August, 10,462 off-plan Oqood transactions were recorded, an increase of 11.4% from the previous month and saw a jump in market share to 64.8%. Meanwhile, Title Deed sale volumes also witnessed a decline, falling by 15.4% and now account for 35.2% of all sales transactions. While Oqood transactions are generally used to measure the off-plan market, several villa and townhouse sales are presented in the Dubai Land Department data as being issued with Title Deeds and as completed properties—instead of being under construction and sold off-plan. After adjusting for this technicality, off-plan transactions secure an even larger market share of 72.2%.
Meanwhile, resales transactions—any subsequent sale of a property that follows the initial first-time sale from the developer, for an off-plan or completed project—stood at 5,272 in August representing a market share of 32.7%, decreasing by 8.4% month-on-month.
New off-plan development project launches remain at record highs, with just shy of 7,400 off-plan units added to the market for sale with an anticipated combined gross sales value of ~AED 16.5 billion. Apartments represent 82.2% by volume of this new inventory, while townhouses and villas represent 14.1% and 3.7% respectively.
Year-to-date, new project launches have reached nearly 86,000 units and AED 213.7 billion in aggregate sales value and are well on track to surpass last year’s AED 272 billion. With nearly 200 additional projects in the planning phases being tracked by the Property Monitor team, we anticipate that new launches will maintain their historically high levels throughout the remainder of 2024 and for a further 35,000-40,000 units to enter the off-plan market. Expect to see significant growth of new development activity across a myriad pricing segments and communities, particularly for apartment in Dubai Islands, Jumeirah Garden City, Dubai Maritime City, Motor City, and Dubai Land Residence Complex, as well as single-family units—townhouses and villas—in The Valley, The Acres, The Oasis, and The Height Country Club.
Mortgage transaction volumes decreased by 10.1% in August dropping to 3,589, this follows July’s stellar performance which saw the second highest level of mortgages ever recorded. This dip is inline with our earlier forecast, and we continue to believe that it will likely be a momentary pause as borrowers wait for rates to fall with the first rate cut all but certain to be at the upcoming US FOMC meeting in September. Once interest rates begin to ease, we foresee monthly loan volumes rallying and expect new record transaction levels being largely driven by refinancing activities as rate differentials and refinancing costs begin to make sense for many borrowers. During August, loans taken for new purchase money mortgages accounted for 51.3% (down 1.7% from last month) of borrowing activity, with the average amount borrowed being AED 1.77m at a loan-to-value ratio of 76.7%.
Meanwhile, loans for refinancing and equity release saw their market share increase by 0.9% to 34.7%. The remaining 14% up by 0.8% from last month) was due to bulk mortgages—those taken by developers and larger investors with multiple units. The 497 bulk loans issued for the month were spread across several projects, most notably portfolio mortgage registrations at Golden Dream Tower 1 (230) in Jumeirah Village Circle, Continental Tower (27) in Dubai Marina, and the podium retail and commercial units at DAMAC Towers by Paramount (15).
Forward looking, we anticipate the market will continue its upward trajectory with price growth and high transaction volumes. While we do not foresee an overall slowdown, the gap between off-plan and completed property sales is likely to widen further. This is partly due to the robust pipeline of off-plan projects and partly due to the availability of suitably priced inventory. As mortgage rates ease and prospective purchases find themselves with greater buying power ready properties could witness a bump in activity, however, this will rely on sellers pricing correctly and not seeing this as an opportunity to test aggressive pricing strategies.
