To be successful in the Dubai real estate market, a pragmatic approach to price expectations is required.
To gain a true understanding of market performance, investors should focus on the dynamics of completed homes, which serve as reliable indicators of the true pulse of the market compared to off-plan sales.
Understanding the market dynamics:
The Dubai real estate market operates on fundamental principles that are influenced by the intricate interplay of supply and demand, especially for finished properties. Unlike off-plan sales, which depend heavily on investor enthusiasm and market sentiment, completed properties more accurately reflect market conditions.
Market realities:
Although the real estate market experienced a rapid rise in prices from the end of 2020, sellers and landlords must be aware that this pace cannot be maintained indefinitely. In order to determine the actual market value, the use of open data sources from the Dubai Land Department is crucial. Sound decisions, even if they fall somewhat short of original expectations, contribute to market stability.
Market trends and transaction volumes:
Although there is a clear upward trend in transaction volumes, reflected in 31,000 property sales and an increase of 23% compared to the third quarter of 2022, investors must be aware that this healthy trend is no guarantee of a sustained rise in property prices.
Dynamics of supply and demand:
The significant increase in supply, with 90 new projects registered in Q3-2023, is the highest ever recorded in a third quarter. This increase in supply could dilute demand for various projects and thus slow down the rate of price increases. Avoiding unrealistic market dynamics is crucial for the long-term sustainability of the real estate market.
Conclusion:
In summary, it can be said that the real estate market in Dubai has a stable transaction volume and stable real estate prices. However, investors should scrutinize the unit-level statistics and use the valuable data provided by the Dubai Land Department to make informed decisions. A realistic perspective is key to navigating the ever-changing dynamics of Dubai’s real estate landscape.
