Dubai property market rebounds as sales rise and investors return

New data points to improving sentiment across Dubai, with investors targeting apartments and ready homes as expectations of price declines ease.

Dubai’s residential property market saw sale transactions rise, a pause in price reductions and the return of buyers, according to the latest data from Property Finder and Mortgage Finder.

Activity was largely concentrated within the secondary segment as well as apartments. Investors have seemingly returned through the mid-market, seeking value in homes before pricing stabilises higher.

Speaking on the matter was Cherif Sleiman, Chief Revenue Officer at Property Finder, who summarised July’s market behaviour as “a market that has moved back into growth, with transaction volumes and values rising together and buyers returning with real intent […] we expect that momentum to carry through the second half of the year.”

Dubai property sales rise in July

Looking at the numbers, sale transaction volumes rose from 8,887 in June to 9,217 in July, a climb of 3.8 per cent. Transaction value climbed 5.2 per cent from AED 33.2 billion to AED 34.9 billion.

This increase came near entirely from the secondary market, which saw volumes grow roughly 18 per cent from 4,100 to 4,800. This figure suggests an appetite for ready stock. Commercial activity volume grew a substantial 24.8 per cent to 397 deals, achieving a value of AED 5.8 billion.

As buyer sentiment continues to normalise, so does the demand among home seekers, those planning to buy within six months grew from 66 to 68 per cent.

Those expecting further price declines fell from 56 to 52 per cent, a correction from the previous peak of 73 per cent at the start of the conflict. Those expecting prices to remain flat or rise rose from 44 to 48 per cent.

Moving with demand, Property Finder’s sale-listing price index settled at 2.5 per cent of the pre-conflict baseline for the second consecutive month.

Advertised and final transacted prices began to narrow between 5.5 and 11 per cent in July. A sign of convergence when compared with 6 and 12 per cent seen in May.

Apartment activity

Apartments gained ground over villas and townhouses, growing from 59.5 to 62 per cent of sales. Studios and one-bedroom units drove this. Property Finder suggests this illustrates a sign of stronger investor appetite for higher-yield, more liquid stock.

Mortgage Finder data demonstrates a similar return of investor confidence, as mortgage transactions rose from 9 per cent in June to 12.8 per cent in July. These mortgages were largely of the middle-income bands.

Applicants earning between AED 20,000 and AED 59,999 a month made up 62.4 per cent of the share. Higher earners, above AED 60,000, observed a tighter villa and townhouse pipeline, which has likely limited conversion.

According to Dubai Land Department data, of 2,887 mortgages registered in July, apartments accounted for 81.9 per cent of volume despite only 20.3 per cent of all apartment sales involving a mortgages at all. This shows how differently the segments behave and interact with the financial market. Apartments are largely transacting in cash, whilst villas tend to require financing with an owner-occupied mindset.

On a final note, rental activity too grew. New leasing transactions rose 2 per cent when compared with the pre-conflict baseline, supported by tenants using softer rents to move into larger homes.