Dubai property in Q1 2024: a record start at peak rates

UAE interest rates stayed at 5.40% for the whole of the first quarter of 2024, the top of the cycle. Buyers registered 44,380 home sales anyway. That beat every quarter of 2023, and each month was busier than the one before: 13,833 in January, 14,563 in February, 15,984 in March.

One rule did change. On 24 January the AED 2m property Golden Visa dropped its minimum down payment of AED 1m (or 50%), so mortgaged and instalment-plan homes now counted at full value. We can't prove that lifted March. The timing is hard to ignore, though.

Where people bought surprised us more. Dubai Maritime City had around 500 sales in the first quarter of 2023 and 2,877 in this one. Almost all of them were off-plan.

The quarter in figures

Sales came to AED 99.4bn, up 20.8% on a year earlier, from 21.4% more deals. The median price was AED 1,534 per sq ft. That is 2.7% above the last quarter of 2023 and 15.1% above the first.

The yearly figure looks big because of where it starts. The first quarter of 2023 was the low point in our series, after the median fell 10.1% to AED 1,332 per sq ft. The next three quarters added 4.4%, 4.2% and 3.0%. This one added 2.7%, the smallest step of the run. Prices were still rising, only more slowly.

How we worked it out

We count residential sales of apartments and villas registered with the Dubai Land Department. Land plots, commercial units and whole buildings are left out, so our totals come in below headline figures that include land.

AED 99.4bn across 44,380 sales is about AED 2.24m a deal. The median deal was AED 1.39m. That is the sale in the middle if you lined every deal up by price. The 1.9% of sales above AED 10m pull the average up and barely touch the median, which is why we quote medians.

Year on year (YoY) compares a quarter with the same quarter twelve months earlier, which takes the seasons out. Sales went from 36,570 in the first quarter of 2023 to 44,380, a rise of 21.4%. Quarter on quarter compares it with the quarter just gone. The median went from AED 1,493 per sq ft to AED 1,534, up 2.7%.

Area prices per sq ft are medians too. JVC's AED 1,266 and Dubai Maritime City's AED 2,354 describe what sold there this quarter. Neither is a price list.

What sold, and where

Off-plan homes were 59.7% of sales, three points more than a year earlier, and 58.9% of the value. The median off-plan sale was AED 1,747 per sq ft against AED 1,235 for a ready home, about 41% more. Part of that gap is newness and part is location. A new tower and a ten-year-old one on the same street don't sell at the same rate.

Two in three deals (65.4%) were under AED 2m.

One-bedroom flats were 44.4% of apartment sales and studios 21.6%, so two in three apartments sold had one bedroom or none. Three-beds were 7.1%. Villas made up 10.9% of all sales at a median of AED 1,187 per sq ft. Apartments sold at AED 1,617, because a villa's price is spread over far more floor space.

Jumeirah Village Circle (JVC) led again with 5,277 sales, 11.9% of the market. Business Bay was second with 3,559. Dubai Marina went the other way, down 24.1% to 2,217. Most of the Marina is built, and 64% of its sales this quarter were resales, so it has few launches to add volume. Further down, Jabal Ali First more than doubled to 1,427.

What we noticed

Expensive money didn't slow it. The base rate had been 5.40% since July 2023 and stayed there, and sales still rose every month. Our records don't show how each buyer paid, and we won't guess. Whatever drove demand this quarter, cheap credit wasn't it.

Dubai Maritime City was nearly all new stock: 2,877 sales, 99.8% off-plan, at a median of AED 2,354 per sq ft. With almost no resales, that median comes from developers' price lists. Off-plan in Dubai sells at published prices, so the figure shows what launches asked and buyers accepted. It says nothing yet about what those homes will fetch second-hand.

The pipeline kept growing. The official project register added 35 projects with 11,961 homes in the quarter, while 40 projects with 7,409 homes were marked complete. The new homes arrive later, and somebody has to buy or rent them when they do.

Villas rose faster than apartments. The villa median was AED 1,187 per sq ft, 16.6% above a year earlier. Apartments rose 14.5% to AED 1,617. The overall median, at 15.1%, sat between the two.

More tenants stayed put. Ejari registered 191,303 tenancy contracts, and 57.5% were renewals. The median annual rent was AED 61,600, 10% more than a year earlier. Under Decree 43 of 2013, a landlord's rise on renewal is capped on a scale from 0% to 20%, depending on how far the rent sits below the index average. That cap is one reason staying can cost less than moving.

For developers

• Price against what your area has recorded. JVC's median was AED 1,266 per sq ft and Business Bay's AED 2,264. A launch has to explain its distance from its own area's figure, not from the dearest launch in town.
• Build for the buyers who turned up. Studios and one-beds were two thirds of apartment sales. Three-beds were 7.1% and four-plus under 1%.
• Watch the queue. With 35 new projects registered in one quarter, your project competes with the one next door for the same buyers. Off-plan prices are published, so the market adjusts through how fast units sell.
• Be careful with visa language. The January change let mortgaged and instalment-plan homes count towards the Golden Visa, but off-plan eligibility was reported at the time as case by case. Don't promise a visa in marketing.

For investors

• Know what the off-plan premium buys. Off-plan cost about 41% more per sq ft than ready this quarter. That pays for a payment plan and a new building. Compare it with ready homes in the same area, not the city median.
• Look for rent evidence at building level. The citywide median rent rose 10%, but your tenant pays the rent for your building. Ejari records for similar units nearby are the closest thing to proof.
• Count the full cost of entry. Budget the 4% transfer fee, which the buyer usually pays, plus service charges. Banks lend at most 50% on off-plan, so at least half of an off-plan purchase is your own money.
• Think about the exit before you buy. JVC turned over 5,277 homes in three months. A district that is almost all off-plan has no resale record yet, so nobody can tell you how fast a unit there will sell.

The spring brought floods and a record month: read Q2 2024, or go back to Q4 2023. Current figures are on our analytics page.