Dubai property in Q2 2024: floods in April, a record May

On 16 April 2024 Dubai had about 142mm of rain in 24 hours, the heaviest in 75 years. The airport was disrupted and some communities flooded. Had you asked us that week how the quarter would end, we'd have guessed lower.

We'd have been wrong. April came in at 14,143 home sales, below March's 15,984. Then May registered 21,544, more than any month in our records back to January 2023, and June settled at 15,957. The quarter closed on 51,644 sales worth AED 111.1bn, and two in three of them were off-plan.

The numbers

Deals were up 16.4% on the first quarter and 40.4% on a year earlier. Value rose 29.9% year on year. The median price barely moved: AED 1,551 per sq ft, 1.1% more than in the first quarter and 11.5% more than a year earlier.

So volume jumped while the price line flattened. Since prices turned up in the second quarter of 2023, the quarterly rises have gone 4.4%, 4.2%, 3.0%, 2.7% and now 1.1%, each smaller than the last. Prices were still going up. Buyers were arriving faster than prices were rising.

How we worked it out

Our figures are residential sales of apartments and villas registered with the Dubai Land Department. Land, commercial units and whole buildings are excluded.

AED 111.1bn across 51,644 sales is an average of about AED 2.15m a deal. The median deal was AED 1.40m. The median is the middle sale when every deal is lined up by price, so the 1.8% of sales above AED 10m can't drag it around the way they drag the average.

Year on year (YoY) compares this quarter with the second quarter of 2023: 36,771 sales then, 51,644 now, a rise of 40.4%.

This quarter also needs the difference between percent and percentage points. Off-plan was 52.7% of sales a year ago and 65.2% now, a rise of 12.5 percentage points. Measured in percent, off-plan's share grew by almost a quarter. Both are true, but points are the fair way to report a change in a share, and they're what our charts show.

The May spike is plain percent. 21,544 sales against April's 14,143 is 52% more in one month.

What sold, and where

Off-plan made up 65.2% of deals and 62% of the value, so the average off-plan deal was smaller than the average ready one. Medians per sq ft hardly moved on either side: AED 1,731 for off-plan and AED 1,230 for ready. Deals under AED 2m were 65.4% of the total, the same share as in the first quarter.

One-bedroom flats were 42.6% of apartment sales and studios 22.3%. Two-beds edged up to 27.1%. Villas were 10.7% of sales, and their median climbed from AED 1,187 per sq ft in the first quarter to AED 1,269, up 6.9% in three months.

Jumeirah Village Circle (JVC) stayed on top with 5,467 sales, 73.2% of them off-plan. Business Bay rose 74.6% on a year earlier to 3,842. Al Merkadh, the registry district that takes in Sobha Hartland, nearly doubled to 3,373. Ras Al Khor Industrial First entered the table with 2,310 sales, all off-plan, with nothing to compare against a year earlier. Al Hebiah Fourth rose 141.3% to 1,742.

Dubai Marina fell 39.7% to 2,483 sales, and its median dropped from AED 2,540 per sq ft to AED 2,210. We wouldn't read that as Marina prices falling 13% in three months. Area medians swing with whichever towers happened to trade, and the citywide median was still climbing.

What we noticed

Daily life took the hit from the flood. Demand mostly didn't. May was the busiest month in our records, and the villa median for the quarter was AED 1,269 per sq ft, 23% above a year earlier. Apartments rose 11.6% to AED 1,625. Buyers did start asking new questions, about drainage, flood history and how well a community is run.

New stock supplied nearly all the growth. Of the 14,873 extra deals on a year earlier, 14,289 were off-plan. Off-plan sales came to 33,670, 73.7% more than a year earlier and the most in a quarter in our records at the time.

When most of a quarter's growth comes from launches, developers' published price lists set the median per sq ft. Dubai off-plan sells at those fixed prices. The market adjusts through how fast units sell, with no discounts off the list.

The airport story started here. On 28 April the government approved the AED 128bn passenger terminal at Al Maktoum International, planned for 260m passengers a year, with all of DXB's operations to move there. Dubai South, the district around it, wasn't in our top ten this quarter. The next quarter it was second by sales count.

Some of the busiest areas go by registry names buyers never search for. Ras Al Khor Industrial First, Al Hebiah Fourth and Wadi Al Safa 5, a Dubailand district, made up 12% of the quarter's sales between them.

Rent registrations dipped, as they had the spring before. Ejari took 162,000 tenancy contracts, down from 191,303 in the first quarter. In 2023 the second quarter was also the year's lowest, at 150,564. The median annual rent rose 12.1% to AED 65,000, and 57.1% of contracts were renewals. The median apartment rent rose 10% to AED 55,000, and the median villa rent 8.9% to about AED 152,500.

For developers

• Plan for disruption without assuming it kills demand. April's flood cost the market a few weeks and May made them up. A launch calendar with a fortnight's slack costs less than one that can't move.
• Expect questions about drainage. After April, flood exposure and community management joined buyers' checklists. Have clear answers on stormwater design and who maintains it.
• Know your competition. Buyers registered 33,670 off-plan sales this quarter, spread across many launches. Price lists are public, so buyers can set your launch beside the others.
• Keep the ticket size within reach. Two thirds of deals were under AED 2m, and off-plan deals averaged less than ready ones. A mix heavy in large layouts asks buyers to stretch.

For investors

• Read percentage points carefully. A share that moves from 52.7% to 65.2% has risen 12.5 points, not 12.5%. Marketing that blurs the two tends to flatter the number.
• Don't price an area off one quarter's median. Dubai Marina's moved 13% between two quarters, most likely because different towers traded. Look at several quarters and at comparable units in your building.
• Check the physical risks. Ask for the building's flood history, its drainage and the community's maintenance record. Future buyers and tenants will ask you the same.
• Compare ready and off-plan on the same terms. A ready home at AED 1,230 per sq ft can be let now. Off-plan at AED 1,731 earns nothing until handover. Work out what the wait costs you, and whether the payment plan covers it.

Read Q1 2024 for the record start under peak rates, or Q3 2024 for the summer that followed. If you're weighing a purchase now, /solutions/investors sets out how we help.