In Dubai's real estate market, the demand for apartments is gradually surpassing that for villas, revealing a significant shift in residential preferences. According to data from April 2023, about 58% of homebuyers are looking for apartments, while 42% are seeking villas or townhouses. This contrasts sharply with trends during the pandemic when restrictions on travel and outdoor activities led many to seek larger living spaces, boosting sales of villas and townhouses.
The continued rise in demand for apartments is driven by an influx of professionals moving to Dubai for broader career opportunities. These professionals typically seek convenient residences in city centers or business districts, and apartments are their preferred choice due to their location advantages, ease of maintenance, and cost-effectiveness.
Additionally, the rapid population growth in Dubai is a key factor driving the increased demand for apartments. Statistics show that Dubai's population grew by nearly 100,000 in 2023. In the first quarter of 2024, Dubai welcomed 25,700 new residents, while only 6,500 new residential units entered the market during the same period, exacerbating the imbalance between supply and demand for apartments.
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Data from the rental market also indicate a rising trend in apartment demand. 79% of tenants are looking for apartments compared to just 21% seeking villas or townhouses. Cherif Sleiman, Chief Revenue Officer of Property Finder, notes that despite changing market demands, the real estate sector maintains strong momentum, with a clear increase in consumer demand for apartments.
Development plans and infrastructure projects, such as the operational shift from Dubai International Airport to Al Maktoum International Airport, are also expected to stimulate housing demand in developing areas. Emerging communities, especially in the south of Dubai and along Sheikh Mohammed bin Zayed Road and Emirates Road near the new airport and multiple residential and hotel projects, are becoming investment hotspots attracting more residents and investors.
In terms of investment returns, a significant increase in the number of off-plan transactions and their total value also demonstrates market vitality. Data from April 2023 shows that the total number of transactions increased by 86.51% year-over-year, reaching 7,203 transactions, with the total value soaring by 77.09% to approximately 13.9 billion dirhams. This growth trend reflects the market's positive expectations for future development.
Regulatory changes also indicate an improvement in supply quality. Sleiman points out that new regulations requiring primary unit licenses to advertise these properties will further positively impact the market, enhancing the overall quality of residential projects.
John Lyons, Managing Director of Espace Real Estate, observes that due to high rents, more tenants are opting to become homeowners. The mortgage market's low interest rates and more relaxed visa regulations make purchasing more accessible, prompting more people to consider buying rather than renting in a high-rent environment.
