Dubai, UAE – The residential real estate market in Dubai witnessed a recovery during July, with the number of sales transactions increasing, and sellers stopping lowering prices. Buyers return to the ready-made real estate market.
Activity was concentrated in the secondary market and the apartment category, with value-seeking investors returning to the middle category. Buyers sought to secure their homes before prices held.
The number of sales transactions increased from 8,877 transactions in June to 9,217 transactions in July. With an increase of 3.8%, its value rose from 33.2 billion dirhams to 34.9 billion dirhams, a growth of 5.2%.
The increase came almost entirely from the secondary market, whose transaction volume grew by about 18% from 4.1 thousand to 4.8 thousand transactions. In an indication of the growing demand for prefabricated properties.
Business activity also increased, with the number of transactions increasing by 24.8% to 397 transactions, worth AED 5.8 billion.
buyer confidence
Buyer confidence continued after stabilization, with the percentage of home seekers planning to purchase within six months rising from 66% to 68%.
While the percentage of those expecting further price declines fell from 56% to 52%, continuing the correction path from a peak of 73% following regional challenges.
The percentage of those expecting prices to stabilize or rise increased from 44% to 48%.
The sales advertising price index from «Property Finder» stabilized in July at a level 2.5% below the previous baseline for regional challenges, for the second month in a row. After a continuous decline since March.
The gap between announced prices and final transaction prices also narrowed from a range of 6% to 12% in May to 5.5% and 11% in July. Indicating convergence of expectations between buyers and sellers.
Investor confidence returns
In July, apartments regained their share of villas and townhouses, rising from 59.5% to 62% of total purchase orders. With studios and one-bedroom units at the forefront. In an indication of increasing investors’ appetite for higher-yielding and more liquid assets.
Morgig Finder data indicated a return in investor confidence. Their share of real estate financing transactions rose from 9% in June to 12.8% in July, with a concentration in middle-income brackets.
Applicants with a monthly income between 20,000 and 59,999 dirhams accounted for 62.4% of total real estate financing applications. While those with incomes exceeding 60 thousand dirhams continued to face the limited supply of villas and adjacent houses. This is likely to limit the conversion of orders into deals in the highest-priced market segment.
Data from the Dubai Land Department shows differences in procurement financing methods between the two sectors. Of the 2,887 mortgages registered in July, with a total value of AED 4.93 billion, apartments accounted for 81.9% of the volume. However, only 20.3% of total apartment sales were made using real estate financing, compared to 67.8% of villa sales.
