Land Sterling, a premier real estate consultancy, has released its Q1 2024 Dubai Property Watch report, highlighting significant growth in Dubai's residential market. The report reveals a substantial increase in residential unit deliveries and sales transactions, reflecting the city's continued appeal as a real estate investment hub.

In Q1 2024, Dubai witnessed the delivery of approximately 6,500 residential units. Apartments dominated the recent developments, accounting for 75% of the completions, while villas comprised 25%. The areas with the highest number of handovers were Meydan One in Mohammed Bin Rashid (MBR) City, Jumeirah Village Circle (JVC), and Al Furjan.

Edward Sanders, Managing Director of Land Sterling, commented, "The first quarter of 2024 has been a period of robust activity for Dubai's residential sector. The strong increase in new unit deliveries and sales transactions underscores the market's resilience and the sustained demand for high-quality residential properties."

The report projects that around 64,400 residential units are expected to be delivered by the end of 2024, assuming all projects are completed on schedule. However, based on Land Sterling's continuous market analysis, it is estimated that approximately half of these units will be handed over to buyers within the year. The majority of future handovers are anticipated in MBR City, JVC, Damac Lagoons, and Business Bay, with 70% of the future supply expected to be apartments and 30% villas.

Q1 2024 also saw over 35,300 sales transactions worth around AED 88.8 billion, marking a year-on-year increase of 20.5% in volume and 24.1% in value. Off-plan sales were particularly strong, accounting for 63% of total transaction volumes. Approximately 29,300 apartment units and 6,000 villa units were sold during the quarter, with two-bedroom apartments being the most popular among buyers.

"The robust demand for off-plan sales can be attributed to the attractive and flexible payment plans offered by developers," said Sanders. "Innovative payment options, such as the one percent monthly instalment and buy-back guarantees, have been key drivers in attracting buyers."

Regarding rental trends, the report noted significant growth in average rents. Villa rents increased by 14% year-on-year, while apartment rents saw a sharper rise of 22%. The recalibration of Dubai's Real Estate Regulatory Authority (RERA) rent calculator to reflect open market pricing is expected to influence rental rates positively. Despite high sales prices and interest rates, some tenants are transitioning into end-user buyers to avoid renewal negotiations or potential relocations.

Additional economic indicators further underscore the city's vibrant market conditions. Dubai's GDP growth for the first nine months of 2023 was reported at 3.3%, demonstrating strong economic fundamentals. The Consumer Price Index (CPI) increased by 3.3% in March 2024, driven primarily by the insurance and financial services sectors.

Price trends have also been favourable, with apartment and villa values growing by 20% and 19%, respectively. Rents for apartments and villas increased by 21% and 20%, highlighting the strong demand for residential properties across Dubai.

Land Sterling's report highlights that the top-performing areas in terms of transaction volume were JVC, Business Bay, Dubai Maritime City, Downtown Dubai, and Dubai Hills Estate. In terms of transaction value, Business Bay, Palm Jumeirah, Downtown Dubai, Dubai Hills Estate, and JVC led the market.