Dubai’s real estate market has demonstrated resilience with a 46 percent surge in transactions and a 37 percent increase in value, as indicated by a recent study.
A delay between purchases and registrations, coupled with a decrease in new launches during the summer, has led to a significant perceived drop in off-plan registrations in recent months.
The sudden and sharp decline in off-plan transactions in Dubai during September-October is attributed to a combination of factors: a 2-3 month lag in house purchases and their registration with the Dubai Land Department (DLD), along with a reduction in new project launches during the summer. This insight was revealed by a new study conducted by Realiste, a leading AI-based proptech.
Contrary to concerns about a downward trend in the market, the real estate sector in the city remains robust. Research by Realiste, based on data directly sourced from developers in Dubai through integrated CRM systems, highlighted the substantial surge in transactions and value registered in September-October this year compared to 2022.
Reports citing DLD data raised worries about a 65 percent decrease in off-plan registered sales from September to October, hinting at the end of the prosperous market, as per several quarters.
Realiste’s AI study, drawing insights from over 300 Excel sheets of data received daily from Dubai’s developers, shed light on the market conditions.
The study emphasized that the perceived collapse is not an indicator of an imminent market downfall but rather a result of temporal inconsistencies and deliberate reduction in summer project launches.
The 65 percent decline in off-plan sales observed is influenced by the time lag between deal and registration, averaging 2-3 months, and a significant reduction in summer project launches. This discrepancy reveals the true complexity of market data, as indicated by Realiste.
The report highlighted that the observed data in September and October actually represents transactions completed, on average, in June, July, and August, showcasing the temporal inconsistency.
Furthermore, this year’s summer season witnessed a substantial reduction in project launches compared to 2022, leading to a scarcity in supply. This scarcity accelerated sell-outs and redefined market dynamics, contributing to the perceived dip in off-plan sales.
Despite the reported dip, the study reaffirmed Dubai’s reputation for resilience and rapid development in its real estate market.
The data depicted a steady rise in bookings, indicating ongoing vitality in the market. It also pointed out the unique market conditions where the primary market surpasses the secondary market in size, challenging traditional market compositions.
The primary and secondary real estate markets in Dubai have exhibited healthy growth, with a 46 percent increase in transactions and a 37 percent increase in the total value of registered sales in September-October this year compared to 2022.
The study stressed the importance of considering factors beyond transaction data alone to assess the overall health of the real estate market. It pointed out that analyzing the number of bookings is crucial for a holistic view.
The Dubai real estate market has seen significant growth, prompting speculation about an impending market correction. However, the study emphasized that recent data indicating a decline in off-plan transactions does not signify an impending market downturn.
Publish Date: Fri 10 Nov 2023
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