The ready property market in Dubai is experiencing a supply shortage due to an increase in end-users driven by rising rentals.
While the off-plan sector leads the property market rally, there remains strong demand for ready properties, with well-priced units often selling within a month of listing.
The supply issue is exacerbated by the influx of high-net-worth individuals and residents, with Dubai gaining over 8,000 new residents each month. This growing demand has led to a situation where many projects are quickly sold out, and correctly priced ready properties are selling in under four weeks, according to Provident Estate.
“Dubai is getting an additional 8,000 plus residents per month, the demand outweighs supply in the majority of projects being launched and sold out and ready properties correctly priced are selling with a maximum of four weeks of being on the market,” Provident Estate said.
Engel & Völkers Middle East noted that while 2024 has seen high demand for ready properties, the lack of available stock has shifted growth to the off-plan segment. There has been a 13.2% increase in yearly ready property transactions, and ready property prices surged by 14.57% in the first half of 2024 compared to the previous year.
Growing End-Users
Dubai is on course to meet its 2040 population growth targets, with the resident count rising from 3.66 million at the start of 2024 to 3.754 million by August 1. At the current growth rate, the population is expected to exceed 5.5 million by 2040.
Industry experts suggest that the majority of buyers—whether end-users or millionaires relocating to Dubai—are investing in ready properties for personal use due to high rental costs.
According to the World’s Wealthiest Cities Report 2024 by Henley Partners and New World Wealth, the number of individuals in Dubai with liquid assets of $1 million or more increased by 78, reaching 72,500 between 2013 and 2023.
“The Dubai real estate market has seen continuous growth with record sales across all sectors. Notably, the end-user market, which has grown since 2020 due to the Emirate’s stability, has seen villa and townhouse prices rise due to low supply. Luxury properties in Dubai continue to attract high-net-worth individuals and investors seeking premium real estate opportunities,” Provident Estate said.
Dubai’s property market currently offers an average rental yield of 6-8%, compared to 2-3% in London and Hong Kong, and 3-4% in New York. While property price appreciation in these cities has ranged between 10% and 20% over five years, Dubai saw an 18% increase in just one year from 2022 to 2023.
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