Demand for apartments in Dubai is increasing as more professionals move to the Emirates. This is a shift from the trend during the Covid-19 pandemic when sales of villas and townhouses had spiked due to people looking for larger living spaces while adhering to travel and outdoor restrictions.
However, demand for apartments has been outpacing supply for some time now. For instance, when Dubai’s population rose by nearly 100,000 in 2023, only 50,000 residential units were available. Similarly, in the first quarter of 2024, 25,700 new residents arrived in Dubai, while only 6,500 new units entered the market.
Recent data indicates that almost 58% of property buyers in April were looking for apartments, while 42% searched for villas or townhouses. Among tenants, 79% sought apartments, while 21% looked for villas or townhouses. This indicates a clear rise in demand for apartments compared to previous months, where villas were more popular.
Cherif Sleiman, chief revenue officer at Property Finder, said that the real estate market remains dynamic, with an interesting shift in consumer preferences towards an increased appetite for apartments. He expects that the market will continue to evolve following announcements such as the shift of operations from Dubai International Airport to Al Maktoum International Airport, which will likely spark renewed demand across developing areas. “With the population continuing to grow and many people setting up homes in the region, we have seen a significant increase in mortgage leads and buyer registrations over the last quarter,” said John Lyons, managing director, of Espace Real Estate.
According to a study by Property Finder, 64% of tenants prefer furnished apartments with ready interiors, while 33% opt for unfurnished options. For villa/townhouse rentals, 55% of people prefer unfurnished units and 44% opt for furnished options.
Industry executives predict that there will be higher demand for apartments and villas in Dubai South and on either side of Sheikh Mohamed bin Zayed Road and Emirates Road in the coming years, mainly due to the Dubai Metro’s Blue Line and the shifting of operations from Dubai International Airport to Al Maktoum International Airport.
Most of the demand will be for the off-plan units in these new areas such as Dubai South, JVC, Marjan, Dubailand, Damac Hills, International City, Silicon Oasis, and other communities located on key arteries leading towards Al Maktoum International Airport because off-plan units will be higher returns for investors as the population will increase in those areas due to development of airport, new residential and hospitality projects.
The Arabian Travel Market, 6-9 May 2024 at Dubai World Trade Centre
Considering the population growth of professionals and market supply, the demand for apartments will continue to increase in the foreseeable future. This trend will push demand, rentals, and prices for apartments upwards.
