Shortage of Residential Real Estate Led to 55% Decline in Villa Sales in Dubai in February 2024

Evidently, the anticipated slowdown in sales in Dubai has begun in the emirate’s villa market. Over the past February, the number of transactions for the sale of private houses decreased by 55% year-over-year. However, the situation appears more promising given the 22.8% year-over-year growth observed in January 2024. Furthermore, no correlation has been identified between the decrease in sales and investor demand. Nevertheless, the situation certainly warrants attention.

Analysts point out that the decline is due to a chronic shortage of villas in the market, creating a gap between demand and supply. The supply of housing in the market has shifted towards apartments. Although new villas will enter the market this year, for example, in the Casa Serena, Tilal Al Furjan, and Damac Lagoons areas, the supply deficit may only be partially covered.

Demand for villas is growing and it is highly solvent. For example, the value of villa transactions in February increased by 3.13% year-over-year, totalling $898 million. This stands in stark contrast to trends in the apartment market. In February, apartment sales increased by more than 51% year-over-year. More than 9,500 units were sold, with total revenue from transactions reaching $4.7 billion. The demand remains steadfast.