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  • Stephen James Mitchell

My Summary of the Property Monitor May Report: Insights Worth the Wait


Property Monitor May Report Summary

The Property Monitor May report wasn't released until the end of June, much later than usual, but the data it contains is certainly worth the wait. The report provides an in-depth look at Dubai’s real estate market, highlighting a mix of significant price appreciation, record-breaking transaction volumes, and buoyant mortgage activity. Here’s my personal summary of the key insights from this comprehensive report.

 

Property Monitor Market Report Overview - May

 

In May 2024, Dubai’s real estate market continued to show robust growth, with property prices reaching new heights. The Property Monitor Dynamic Price Index (DPI) revealed that average property prices climbed to AED 1,360 per square foot, marking a 0.69% increase from April. This milestone is particularly impressive as it surpasses the previous all-time high recorded in September 2014 by 10.25%. Readers should note that in comparison to other major global cities, Dubai residential real estate still ranks 26th in terms of average price per square foot, indicating that there is still plenty of room for upward momentum.

 

Sales Transactions

 

May witnessed an extraordinary surge in sales transactions, totaling 17,139, a 47.7% increase from April. This surge can be attributed to both local and international demand. The transaction activity rebounded robustly following the public holidays in April, reflecting the ongoing evolution and seemingly insatiable demand for properties in Dubai as the city continues to lead the way in FDI inflows with progressive economic policies and aggressive urban expansion.


Property Monitor Market Report May reveals record-breaking transactions

Off-Plan Projects

 

The off-plan property market remains a significant driver of Dubai’s real estate sector. In May, 10,598 off-plan transactions were recorded, accounting for 61.8% of all sales. The high demand for off-plan projects is driven by the lack of affordable ready properties and the lucrative rental market, which is luring local and international yield-seeking investors into real estate now cash deposit rates are dropping across most major economies. Prominent developers like Emaar Properties are leading this segment with a variety of new projects across the city that cater to different market needs.

 

Mortgage Activity

 

Mortgage activity saw a substantial increase in May, with a 57.9% rise in transactions, bringing the total to 3,359 loans. This growth underscores the robust confidence of mortgage lenders in the property market and increasing numbers of tenants deciding to purchase a home as rental prices continue to increase, albeit at a slower pace than in 2023. Most of these loans (53%) were for new purchases, while refinancing and equity release accounted for 29%. Try out my mortgage calculator.

 

Investment Opportunities

 

One of the main attractions for investors in Dubai’s real estate market is the high rental yields. Excellent returns, with yields often exceeding those found in more established markets, makes Dubai an appealing destination for investors seeking high rental income.

 

Additionally, the consistent price appreciation adds to the market’s allure. With property prices now 73.3% above the market trough of April 2009, the potential for capital gains is substantial. The year-on-year price increase of 17.9% in May 2024 further highlights the market’s robust performance. 

 

Strategic Advantages

 

Economic Stability

 

Dubai’s economic stability is a major draw for investors. The city’s diversification strategy, which focuses on sectors like tourism, finance, and technology, ensures sustained economic growth, which supports the real estate market.

 

Low/No Tax

 

Another significant advantage is the low or no-tax regime. Dubai offers private individuals tax-free rental income and capital gains, making it an incredibly attractive option for investors looking to maximize their returns without the burden of hefty taxes.

 

Secure and Transparent System

 

Dubai's real estate market is underpinned by a secure and transparent regulatory environment. Initiatives such as the Dubai Land Department’s streamlined processes and the establishment of the Real Estate Regulatory Agency (RERA) have bolstered investor confidence. This transparent system ensures that all transactions are secure and in accordance with the law, providing peace of mind for international investors.

 

Relative Cost Per Square Foot

 

Compared to other major global cities like London, New York, and Hong Kong, Dubai offers relatively lower costs per square foot for high-end properties. This affordability, combined with luxury amenities and high-quality infrastructure, makes Dubai a competitive choice for real estate investment.

 

Strategic Location

 

Dubai’s strategic geographical position is another key advantage. The city’s location as a global hub offers easy access to markets in Europe, Asia, and Africa. This, coupled with world-class infrastructure like the Dubai International Airport and the upcoming Dubai World Central, makes Dubai a preferred destination for global investors.

 

Future Outlook

 

The future of Dubai’s real estate market looks promising, with several factors indicating sustained growth:

 

1. Continued Price Growth: Absent any significant economic disruptions, property prices are expected to continue their upward trajectory throughout 2024.


2. High Transaction Volumes: The market is likely to maintain high transactional activity, especially in the off-plan segment, driven by new project launches and strong demand.


3. Mortgage Market Stability: With central bank rates stabilizing, borrowing activity is expected to remain strong, with potential increases in bulk loans and refinancing as interest rates ease.

 


Property Monitor Market Report May Positve Findings

Key Considerations for Investors

 

When considering an investment in Dubai’s real estate market, it’s crucial to keep the following in mind:

 

- Market Research: Conduct thorough research to identify the best areas and property types that align with your investment goals.


- Developer Reputation: Invest with reputable developers to ensure quality and timely delivery of projects.


- Legal Framework: Familiarize yourself with the legal framework governing property transactions to safeguard your investment.


- Financial Planning: Consider the available financing options and plan your finances accordingly, keeping an eye on interest rate trends and mortgage terms. We offer investors completely impartial real estate investment advice and support throughout the entire property investment lifecycle. With recognition as a top-ten UAE broker for the past four years and a team of over 100 realtors, we provide comprehensive assistance in buying, selling, and letting properties, with access to a database of over 1 million investors.


Our services include detailed portfolio analysis and management to maximize ROI, exclusive access to pre-market launches and distress deals, and the use of advanced analytic software and AI-driven tools for smart decisions. Additionally, we provide tailored services for high-net-worth individuals, including tax advisory, mortgage financing, offshore banking, legacy planning, and more. If you’re an investor, we believe we can offer you a unique and unparalleled approach to developing effective real estate investment strategies.

 

Conclusion

 

Investing in Dubai’s real estate market offers numerous opportunities, from high rental yields and capital appreciation to a stable economic and regulatory environment. Staying informed and strategic in your approach will help you maximize your returns. With the market poised for continued growth, now is an opportune time to explore Dubai’s vibrant real estate landscape.

 

I hope this summary of the Property Monitor May report provides valuable insights and encourages you to consider the potential of Dubai’s real estate market. For more detailed information, you can access the full report here.

 

If you’re ready to take the next step, I’d love to chat with you about your investment goals. Schedule a call back. Thanks for reading! Stephen James Mitchell

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