These trends provide valuable insights into potential market performance heading into the new year.
Dubai’s property market is experiencing unprecedented demand, with prices reaching an all-time high in November 2023.
In these extraordinary times, new trends are emerging in the emirate’s vibrant real estate market, such as suburban migration, the rise of first-time buyers, the redevelopment of premium homes, a high premium in resale prices, the stability of middle market and new ways of life among others, since the local market continues to be predominantly buyer.
We spoke to different sections of industry executives who revealed new trends that emerged late this year as new trends to watch in 2024. These trends provide valuable insights into potential market performance heading into the new year. Here are some:
1. Suburban migration: Homeowners seeking greater value and space are moving from prime, central locations to Dubai’s up-and-coming suburbs and “new” master residential communities such as Jumeirah Village Circle (JVC), Dubai South, Townsquare, Reem and Arjan. These places are still affordable compared to central and prime locations.
2. The increase in first-time buyers: As rentals in Dubai continue to grow to record levels amid high levels of demand, there is a rise in first-time buyers entering the market at the entry level with prices reaching Dh3 million. There is a high demand for apartments and small houses in suburban areas.
3. Remodeling of first class homes: Property investors/owners in prime and in-demand locations are choosing to carry out extensive redesign and refurbishment works on properties before putting them back on the market with premium sales or a higher rental price.
4. Disconnection between seller expectations and market sales prices: With demand for real estate in Dubai at an all-time high, sellers frequently place a premium on sales listing prices. Real-time market results from Allsopp & Allsopp DataHub show a 15 per cent gap between sellers’ average sales prices and the sales prices of transferred properties in the current market.
5. Perfect time to collect: As with any healthy market cycle, buyers and sellers enter and exit at different times. In November, Dubai’s old 2014 record for average price per square foot was finally broken, indicating that the market remains strong. For certain investors and homeowners, now could be the perfect time to take advantage of capital appreciation gains. For end users, the story is different: the rising cost of rent in Dubai has led to a surge among first-time buyers, helping to drive demand for properties in the Dh3 million price range and representing more 70 percent of Dubai’s total. Residential sales transactions in 2023.
6. More properties available: With a host of new projects and off-plan developments entering delivery stage in 2024, property seekers are more likely to have a wider range of options to choose from. It is estimated that around 67,000 units will be delivered in 2024, compared to around 50,000 this year.
There will also be more properties available in 2024 as sellers look to take advantage of current prices. Developers will also continue to release new projects at an accelerated pace. This additional supply is very likely to keep price growth in check in the face of a big jump. For renters, there may be some relief towards the latter part of 2024 as the delivery of more new homes will relieve some pressure on the current rental market.
7. Mid-market stability: The middle market will most likely be affected by price regulation. The majority of the units are those to be completed in affordable areas such as JVC, Arjan, IMPZ and Dubai Land, with mid-market areas such as Mohammed bin Rashid City, Dubai Hills, Dubai Marina and Business Bay set to see properties delivered. finished too. This will add pressure to rental prices in affordable areas and stabilize the mid-market to some extent as rents become less rigid. In the upper segment of the market, where supply has not yet reached the balance of demand, it is estimated that rents will remain the same and prices will rise.
8. New ways of living: With the rise in property ownership, several new trends are emerging in the sector, including short-term rentals and flexible living options, driven by evolving lifestyles, career changes and technological advances. Flexible living solves the current tedium of renting an apartment thanks to technology. This includes choosing and viewing a property, managing move-in details, apartment specifications, and maintenance requests through one convenient platform. Additionally, tenants have the freedom to enter into flexible agreements and can avoid long-term commitments.
9. Greater diversification: In the first half of 2023, the real estate market diversified on a large scale with greener areas on the block, an increase in off-plan projects and ready-made property purchases. In 2024, this diversification is expected to continue. Many of the off-plan projects started in previous years will reach their delivery stages.
10. Steady price growth in 2024: Real estate prices are expected to grow at a stable pace next year, between 3.5 percent and 5 percent in Dubai, driven by sustained population growth, a competitive economic landscape and government initiatives that attract global companies and individuals. The emirate’s real estate sector appears poised for continued expansion, supported by a well-thought-out combination of economic incentives and proactive government measures.
11. Perfect customer experiences: In this age of technology, seamless customer experiences are integral to developing new properties. The new year will see greater integration of new technologies such as 5G, artificial intelligence, Internet of Things (IoT) and other similar technologies into modern homes. People will also have more options to choose from online platforms to buy, sell and rent properties.
News Source: Khaleej Times