Dubai's 3 New Master Communities to Boost Villa and Townhouse Supply

With off-plan sales dominating the market, Dubai is poised to welcome three new master communities in 2024. These developments will significantly increase the supply of villas and townhouses, marking the next phase of the emirate's expansion.

According to Property Monitor, a premier real estate market intelligence provider, Dubai will see the emergence of three new master communities in 2024. Emaar has announced two of these developments, The Heights Country Club and Grand Club Resort, with a third project from Damac expected in May.

"These projects, all situated in the southwestern areas of Dubai along the E611 corridor, are expected to significantly increase the supply of villas and townhouses, marking the next phase of the emirate's expansion," stated Property Monitor in its report.

Preliminary data for new off-plan project launches in February reveals nearly 10,000 units were introduced to the market, primarily consisting of apartments. Single-family homes, including villas and townhouses, accounted for about 15% of these new units, highlighting an undersupplied segment that the upcoming projects aim to address.

In February, Dubai property prices saw a modest increase of 0.83%, following a slight 0.2% rise in the previous month. This trend aligns with forecasts predicting a slowdown in price growth, with annual gains anticipated to reach between 5-8%. 

According to the Property Monitor Dynamic Price Index (DPI) indicates that Dubai property prices are currently at Dh1,294 per square foot, just under 5% below the previous peak reached in September 2014.

"Although price appreciation is modest, the volume of sales transactions continues to grow, increasing by 2.6% in February to a total of 11,913 sales. This sets a new record for the month, surpassing last year's figure by an impressive 30.4%," the report stated.

Residential transactions, including apartments, townhouses, and villas, made up 92.1% of total sales, with 10,966 transactions. The most frequently transacted commercial property types were hotel apartments (2.8%), office spaces (2.2%), and land sales (1.7%).

The report highlighted that the high volume of sales is driven by the strong demand for off-plan properties, particularly in the apartment segment, where sales volumes continue to rise. In contrast, villa and townhouse transactions remain steady, which is attributed more to supply constraints than a lack of buyer interest.

In January, there were 6,384 off-plan Oqood transactions, a slight 0.5% decrease from the previous month and a 1.6% drop in market share to 53.8%. Title Deed sales increased by 6.3%, now accounting for 46.4% of all transactions. Although Oqood transactions typically measure the off-plan market, several villa and townhouse sales appear in Dubai Land Department data as completed properties with Title Deeds rather than as under-construction and sold off-plan, according to the report.

Off-plan transactions command a dominant market share of 59.8%, consistent with the long-term trend between off-plan and existing sales segments. Resale transactions, which include any subsequent sale of a property following its initial sale by the developer, totaled 4,970 in February. This accounted for 41.7% of the market, remaining relatively stable month-on-month. Initial developer sales continued to hold a dominant market share of 58.3%, a slight increase of 0.1%.

Mortgage transaction volumes fell by just under 5.0% in February, with a total of 2,868 loans recorded. New purchase money mortgages constituted 46.1% of this activity (up 6.3% from the previous month), with an average borrowed amount of Dh1.77 million and a loan-to-value ratio of 75.6%. Loans for refinancing and equity release decreased by 0.3% to 37.6% of the market share. The remaining 16.3% (down by 6.0% from the previous month) was attributed to bulk mortgages, which are loans taken by developers and large investors for multiple units.

Source: Khaleej Times