The year 2024 witnessed its record lowest levels, in ten years, in real estate transactions of less than one million dirhams, with only 32.33% of all residential real estate transactions in the Emirate of Dubai, below the above-mentioned limit, according to Global Capital Partners Group and Reden.
2024 was the year of dominance for Jumeirah Village Circle, in terms of sales volume, as it witnessed double the number of transactions witnessed by the Business Bay area in second place (and more than three times the number of transactions witnessed by DAMAC Hills 2 in fifth place).
Despite Jumeirah Circle Village’s astronomical sales volume figures this year, it has yet to break the luxury real estate market grip on the top five communities in terms of sales value, partly due to the decline in average large sales, but also to the fact that luxury has seen another strong year, in 2024, (even if it cannot reach the highs seen in 2023).
The “real estate on plan” market began to gain more momentum, steadily increasing year after year, and consistently surpassing the ready-made real estate market, unlike in 2014; according to the company’s report.
Volume and value trends at the emirate level in 2014, which is largely considered the peak of the real estate market in Dubai before Covid, showed that ready-made property transactions exceeded their counterparts on the plan, in terms of total sales volume and value.
2020 saw this trend suddenly stop, due to the pandemic, but resumed again, as the real estate sales sector on the plan reached almost 70% of the volume and value this year.
A simple cost-cost analysis of the ten-year affordability showed that real estate prices were slowly becoming more expensive, until they peaked in 2018, and since then it has seen a steady decline in properties, which are considered “affordable”, in part due to buyers’ preference for more generous payment plans, offered by developers instead of increasingly expensive monthly installments.
The real estate market began to become more expensive, until 2018, but saw a reversal of this trend; over the past six years, real estate in Dubai has become increasingly less expensive, due to a number of factors.
One of the notable variables highlighted here is the simultaneous increase in mortgage installments, which prompted buyers to turn to developers as financiers.
The market has increasingly turned towards luxurious and new residential areas, and Jumeirah Village Circle is the only exception consistently.
Properties on the plan
Sales of ready-made units exceeded the sales of the units as planned in 2014, constituting 61% of total residential transactions in the emirate. Over the next five years, unit sales steadily outperformed the scheme over their ready-made counterparts, peaking at 63.5% of transactions across the emirate in 2019.
However, the Covid pandemic in 2020 restored parity, but since then on-plan real estate sales have risen again, reaching 68.51% of all residential transactions, in 2024 so far.
Looking at value data reveals a similar picture, as 2019 was again the pre-Covid peak of the chart’s sale share in the market, accounting for 60% of the total value of real estate transactions across the emirate.
At some point after the pandemic so far, the share of sales transactions on the plan in the total value at the level of the emirate has grown continuously on an annual basis, reaching 70% this year.
According to the report, if we look at a simple measure of affordability, we can see that, over the past 10 years, home sales have moved further away from the threshold of real estate sales of less than AED 1 million, after 2018, which saw a peak of more than 46% of all transactions, which occurred with less than AED 1 million.
This is because buyers are becoming increasingly unable to afford monthly loan premiums, and as developers have also become financiers (especially in the field of selling on the scheme), by offering more accessible payment plans, buyers have responded to the order by buying larger homes.
In 2014, it emerged that luxury residential areas dominated sales volumes, accounting for the three largest communities, in terms of total transactions for the year, yet the middle market also saw some representation in the form of Jumeirah Village Circle and the International City, which talked the top five.
But when it comes to the value of sales, luxury properties are undoubtedly the best, with the usual areas, such as Downtown Dubai, Dubai Marina, Palm Jumeirah and Business Bay, at the forefront of these areas.
Over the past ten years, the share of the properties sold on the plan from the market has become more prominent, in terms of total sales volume and value; to the extent that it now constitutes the lion’s share of the total real estate market, and it remains to be seen whether this dominance will continue to expand or will return to the average.
By 2015, the mid-market began to gain more importance, as Dubai Sports City rose to second place in the list of the best sales volume, and Dubai Marina regained first place, despite a decrease in its annual transaction volume by 47%.
Once again, luxury properties dominate the value of transactions at the emirate level, as District One has entered the top five communities. Business Bay and DAMAC Hills 2 achieved the same sales value during the year.
In 2016, we began to witness the decline of the middle market as a dominant force in sales volume at the emirate level, as both Jumeirah Village Circle and International City declined from the top five, and Dubai Sports City fell to fifth place.
Dubai Silicon Oasis is entering the picture, but as we’ll see, this will not continue, as Dubai Hills Estate stands out as a new player in the world of value sales across the city, dominated by luxury properties, replacing DAMAC Hills.
The rest of the field is witnessing familiar faces that continue to maintain their superiority; this is a trend that has remained largely unchanged over the past 10 years. In 2017, the middle market began to decline backwards, with both Silicon Oasis and Sports City exiting the top five.
Jumeirah, Exception
Jumeirah Village Circle appears to be the only exception to this trend, as its sales volume has been higher than most other residential areas in general, over the past two years, regardless of whether those areas in question belong to the luxury or medium market category.
At its peak, there are years when Jumeirah Village Circle accounts for nearly 10% of residential property sales across the emirate, and luxury continues to dominate the best communities, in terms of this year’s sales value.
According to the report, there are five residential areas that will remain largely unchanged over the next seven years; Palm Jumeirah, Dubai Marina, Downtown Dubai, Dubai Hills, and Business Bay.
The market has moved more to luxury areas (i.e., less expensive), and new areas (i.e., those with more projects on the plan). The Village of Jumeirah was the only old area of the middle market that resisted this shift, with communities such as Sports City, Silicon Oasis and International City (which regularly appeared in the Best Communities Rankings) retreated.
Flashback
In 2018, International City emerged among the top five communities in terms of total sales volume for the last time, (to date) in 2018. Apart from some changes, in terms of exact ranking, the top five communities, in terms of total sales value for this year, are exactly, as they were the previous year.
It is worth mentioning that the volume of sales and value decreased this year, for the top five residential areas, although their component areas have often not changed, and in terms of the best areas in 2019, Dubai Hills Estate witnessed a rise in 2019, as it appeared among the top five areas in terms of sales volume for the first time, during this ten-year period.
Dubai Creek Harbor ranked first for the first time, in a year when luxury real estate was dominated, as Jumeirah Village Circle fell to fifth place.
The increase in sales volume pushed Dubai Hills Estate to the top of sales value rankings, with Dubai Creek Harbour taking first place for the first time on the back of rising sales volume.
The year 2020 witnessed a natural resumption, and no new names appeared, in the top five, in terms of sales volume or sales value.
In 2021, with Dubai emerging from the pandemic, we began to witness the beginnings of a new era of luxury dominance. Sales volumes and values, especially values that have reached levels that have not been compromised, have increased since 2014.
2022 saw this trend escalate further as volumes and values now exceeded their highest levels, in 2014.
DAMAC Lagoons entered the competition, for the first time, with nearly 7,000 transactions for the year, a number that would have made it top sales volume charts, in any other year since 2015. However, the strong years of Jumeirah Village Circle and Business Bay push DAMAC Lagoons to third place for 2022.