Property prices for off-plan purchases in areas such as Dubai Hills, Business Bay and Jumeirah Village Circle increased by as much as 30 % in 2023 compared to the previous year.
In August, the average price per square foot for off-plan sales in the emirate was AED1,866 ($508). This is down 4.2 % from the same month last year, according to Chirine El Sebai, team leader at Betterhomes off-plan and investment.
“There is a noticeable shift in market dynamics, and we are now seeing off-plan prices trending lower. This does not necessarily indicate a weakening market but rather a stabilisation after the rapid price increases we witnessed last year,” she said.
Matthew Green, head of research at CBRE Mena region, said price growth in the off-plan market had increased at a slower pace in July, rising by around a single percentage point from the previous month. This followed a 5 % rise in the first quarter of the year compared to the first quarter of 2023.
“Price growth has been at a slower pace of expansion,” said Green.
Artaches Grigorian, a broker with Whitewill Dubai, said the stabilisation in prices was “part of a broader trend where secondary market transactions are gaining traction as buyers look for immediate occupancy or rental income”.
He added that “buyers are becoming more discerning about timing and project completion risks” – in a nod to the boom-and-bust cycles that have been part of Dubai’s real estate sector over the past two decades.
In the year to date, 391 new projects have been launched in the market in Dubai, which is up 43 % year on year. The number of units – a mix of apartments and villas – is up 18 % at just over 84,000, according to research from Cushman & Wakefield Core.
“We have seen developers with large landbanks initiating projects and smaller private developers aggressively acquiring land, which continues to be a challenge to source,” said Prathyusha Gurrapu, head of research and consulting at Cushman & Wakefield Core.