The Dubai property market reached unprecedented heights in 2024, setting a new record with a transaction volume of $142.4 billion. According to the analytical report by fäm Properties, the total number of transactions increased by an impressive 36%, reaching 180,900. This rapid growth is mainly due to the primary market, where sales from developers soared by 30%, amounting to $91.1 billion.
Especially significant is that the average price per square foot increased by 10%, reaching $435. Experts attribute this phenomenon not only to the launch of ambitious projects and attractive payment terms, but also to the growing demand for high-quality residential property maintenance services, which significantly increases the attractiveness of properties for investors.
The secondary market also demonstrated impressive dynamics, with a resale volume of $51.2 billion, 21% more than the previous year. It is noteworthy that the leader in the number of primary sales was Al Barsha South 4, with 12,878 transactions worth $3.7 billion. Business Bay topped the list in terms of transaction value, with $5.7 billion.
In terms of property types, the statistics are as follows:
- Apartment sales reached a record 141,168 units worth $70.9 billion
- Villas showed an increase of 21.1% with 30,938 properties sold worth $44.7 billion
- Commercial real estate grew by 10.1%, amounting to 4,304 transactions worth $2.6 billion
Fam Properties CEO Firas Al Msaddi emphasizes that despite global economic uncertainty, the Dubai real estate market demonstrates exceptional resilience and continues attracting international investors.
January 2024 and January 2025: what changes have occurred in the two markets?
DXB recently shared the latest statistics. And the Dubai primary and secondary real estate market for January 2025 shows significant recovery in all segments. The total volume reached 14,236 transactions with a total value of AED 44.4 billion, 24.1% more than in January 2024. At the same time, the average price per square foot remained virtually unchanged, showing a slight decrease of 0.4% to AED 1,550. In the residential segment, uneven dynamics are observed: the number of transactions with apartments increased by 7.1% (9,945 transactions), and the villa market showed an increase of 89.6% (3,117 transactions). Notably, the average price of an apartment increased by 3.7% to AED 1.4 million, while the average cost of a villa decreased by 6.3% to AED 3.1 million, which may indicate a shift in demand towards more affordable resale properties.
The rental market has grown substantially, with apartment rates up 10.4% to AED 80,000 per annum and villas up 12.5% to AED 180,000 per annum. The commercial segment has grown robustly, up 59.6% to AED 75,000 per annum. The land market has also shown significant activity, with the number of transactions up 151.9% (811 transactions), while the average plot price has decreased by 86.8% to AED 673,600, due to an increase in supply in more affordable locations. Such dynamics raise a logical question: what is more profitable – to invest in new buildings or to pay attention to the secondary market?
Primary vs. secondary: characteristic differences
In UAE real estate, choosing between new buildings and secondary housing requires special attention to detail and understanding the nuances of each market segment. Real estate experts note the growing interest of buyers in both areas, and many owners, resorting to services through an apartment concierge service, find optimal options that fully meet their needs.
The primary market attracts future owners with innovative planning solutions, advanced engineering systems and impressive energy efficiency. Developers delight clients with attractive payment terms, including interest-free installments and exclusive mortgage programs. Objects at the initial stages of construction are fascinating – their price is much more attractive, and the prospects for value growth impress even skeptics. However, possible pitfalls cannot be ignored. Delays in commissioning, non-compliance with the original concept of the project implementation and unpredictability of the development of the surrounding infrastructure. This is only a tiny part of the nuances.
Read also: How to become an apartment owner in a skyscraper.
The secondary market is attractive due to its location in inhabited areas with established infrastructure and a formed community. Potential buyers can assess the house’s condition personally, the quality of management and the real atmosphere of the area, and not just look at a picture on the Internet, and then admire the pit for several years. A significant advantage is the space for bargaining, flexible pricing and often a more attractive cost per square meter. Key characteristics of the two markets:
- Primary properties minimize finishing costs. But at the same time, they involve a waiting period and certain development risks.
- Secondary real estate provides immediate ownership, but may require significant investments in upgrading engineering systems and renovating the space.
- Modern residential complexes integrate advanced technological solutions, but are often located in developing locations where there may not always be access to a supermarket, highway or school.
- Secondary properties are characterized by a formed urban environment, but may demonstrate morally outdated technical solutions.
Investment potential of the primary market
The experience of international real estate markets, especially dynamic ones like Dubai, shows an interesting trend: primary housing can increase in value by up to 15% already at the construction stage. This fact is especially important for investors who consider new buildings a tool for increasing capital.
At the same time, modern developers are actively introducing innovative construction technologies and new approaches to organizing space. Coworking spaces, rooftop lounge areas, and electric charging stations in parking lots appear in new residential complexes. Such solutions not only increase the comfort of living, but also create additional investment attractiveness for the property.
However, it is worth considering the time factor. Market analysis shows that it can take 3-5 years from construction to fully form the area’s infrastructure. This is the period when the owner has already received the keys but is forced to put up with the ongoing improvement of the territory, the absence of some of the declared infrastructure facilities, and possible noise from neighboring construction sites.
Secondary market economy
International practice demonstrates an interesting fact: in developed areas of Dubai, for example, the yield from renting secondary housing reaches 6-7% per annum. Tenants are willing to pay a premium for living in an established area with developed infrastructure.
An essential advantage of the secondary market is the transparency of operating costs. The buyer can find out in advance the actual cost of utility bills, evaluate the quality of the management company’s work and understand the actual energy efficiency of the building. In new buildings, these parameters often come as a surprise to owners after moving in.
Financial instruments and transaction features
Experience from international markets shows the effectiveness of various financial instruments when purchasing real estate. In Dubai, for example, a down payment of 20-25% of the property value is required when buying real estate on the secondary market. Developers offer attractive installment terms and subsidized mortgage rates in the primary market. However, it is essential to remember about hidden costs. According to analysts, the total cost of finishing and furnishings can reach 20-30% of the apartment value. These costs are usually lower in the secondary market, even if cosmetic repairs are necessary.
Legal aspects and risks
Each market segment has its legal features. When purchasing a new building, the key is checking the developer’s permits and assessing the risks of delays in the property’s delivery. International experience shows the effectiveness of the escrow account system for protecting buyers’ interests.
The specifics of transaction execution differ significantly between the primary and secondary markets. When buying a new building, the registration fee to the Land Department is 4%. Additional documentation costs of about $2,000 and an agency commission are added on the secondary market. Usually 2% of the property value.
The transaction cycle on the primary market usually takes several weeks, while on the secondary market it can stretch up to 90 days due to the mortgage registration process. In addition, on the secondary market, it is critical to check the legal purity of the property. A thorough analysis of the transaction history, checking for encumbrances and potential claims of third parties is necessary. Statistics show that about 3% of transactions on the secondary market fail precisely because of identified legal problems. Dubai legislation protects buyers’ rights regardless of the type of property purchased.
Read also: Property inheritance rights for foreigners.
Investment strategies
World practice demonstrates different approaches to real estate investing. For example, in Dubai, 50% of transactions on the secondary market are resales of properties purchased at the construction stage. This suggests that savvy investors skillfully combine the advantages of both market segments.
It is important to consider the area’s development prospects when making long-term investments. Research shows that property values in new areas can increase by 20-30% after the construction of metro stations, shopping centers, and other infrastructure facilities. At the same time, secondary housing in developed areas demonstrates more stable, albeit smaller, value growth.
The impact of market cycles
Analysis of international real estate markets shows that primary and secondary segments react differently to economic cycles. During periods of market growth, new buildings usually appreciate faster due to rising construction costs and increased demand. Secondary housing demonstrates more inert price dynamics, which can be advantageous during market instability.
Conclusion. At 20-88 Real Estate, we do not just accompany these stories – we become part of them. Our team works from two offices in Dubai, one of which is located in The Opus tower in the business district of Business Bay. We will help you understand the nuances of both markets and choose the best option based on your goals and budget. Whether you decide to invest in a new project with the potential for 15% growth in value within 2-3 years or prefer a finished property with immediate profitability, our experts will provide professional support at all transaction stages. Was this article interesting and useful? Want to learn more about the real estate market in the UAE? Subscribe to the website of Konstantin Lyutovich, co-founder of a real estate agency in Dubai, and get notifications about new publications.
