The total number of residential transactions in Dubai for May surged to hit 15,766, the highest monthly figure on record to date, up 44.2% over the previous year, according to CBRE, a global leader in commercial real estate advisory services. 

 

The volume of sales transactions during the first five months soared to 62,180, thus registering a marked increase of 384.3% from the 2019 comparable figure, while outperforming the 2023 record-high by 30.0%, stated CBRE in its latest edition of Dubai’s Residential Market Notes.

 

This year-on-year growth has been supported by a 42.6% increase in off-plan sales and an 11.3% rise in secondary market sales.

 

According to CBRE, Dubai’s residential market has begun seeing a significant upward shift in which price brackets that transactions are happening, but the importance of and available opportunities in the affordable and core market segments cannot be understated. 

 

In May, the number of transactions prices below AED1,000 per sq ft registered a decline of 19.3% from the comparative period a year earlier. 

 

The core market continues to grow and has marked a year-on-year increase of 64.1% in the number of transactions priced between AED1,000 and AED2,000 per sq ft. 

 

Given the upward pressure on prices and strong demand for upper-mid-end properties, the AED2,000 and AED3,000 bracket registered an increase of 154% in activity levels in the 12 months to May 2024. 

 

The lack of available stock in the higher-end segments of the market is impacting activity level, with sales of residential properties priced between AED3,000 and AED8,000 per square foot registering a drop of 19.5% in the year to May, stated CBRE in its report.

 

Residential properties were priced at AED8,000 per sq ft and above only represent 0.2% of total sales registered in May, down from 0.3% a year earlier, owing to the limited levels of demand and availability of such assets.

 

Elevated levels of activity have also continued to underpin stronger-than-expected price growth, stated the property rxpert. 

 

In May, average residential prices in Dubai registered a year-on-year increase of 20.1%, down from the 20.7% growth recorded a month earlier. 

 

Over the same period, average apartment and villa prices increased by 19.8% and 21.8% respectively. In both apartment and villa segments of the market, Palm Jumeirah recorded the highest sales rates per sq ft, with average rates reaching AED2,804 and AED5,228, respectively.

 

CBRe said in the rental market, robust levels of demand continue to drive performance, where in the year to May 2024, average residential rents in Dubai increased by 21.1%. 

 

This increase has been underpinned by a 22.2% increase in average apartment rents and a 13.1% rise in average villa rents. Higher rents within Dubai’s core and prime residential areas have led to a spillover into secondary communities which are now recording considerable increases in rents on an annual basis, stated CBRE in its report. 

 

Looking ahead, the property group expects rental rates to continue its robust growth; however, not at the same pace, where already it has been seeing several key and prime residential neighborhoods heading towards single-digit growth. Affordability constraints are beginning to catch up, it added.

 

Taimur Khan, the Head of Research Mena in Dubai, said: "Demand in Dubai’s residential market continues to record unprecedented numbers, where in the month of May 2024, the highest monthly figure on record has been registered in May 2024, with a total of 15,766 transactions."

 

"For the year to date to May, this brings total transaction volumes to 62,180, up 30% from 2023, and a staggering 384.3% from the same period in 2019," stated Khan. 

 

"Despite the strength of this demand, much has been said about the potential dampening impact of new launches on prices, where supply may again start to outweigh demand. However, the absorption of new stock sits at markedly high levels, where our headline analysis shows at least 70% of units which were launched since 2022 have been sold to date, due to lags in data, we anticipated that this number is materially higher," he added.-TradeArabia News Service