Latest Trends in Dubai's Real Estate Market: Middle-Income Segment Drives Demand for Affordable Apartments
Introduction
While the Dubai real estate market saw a slight cooling in October 2024, it continues to maintain its robustness. Notably, demand from mid-income homebuyers for affordable apartments is strongly supporting the market, demonstrating its resilience and depth.
This article provides a detailed analysis of the current state of the Dubai real estate market and the trends among mid-income buyers driving it, based on the latest data.
Overview of the Dubai Real Estate Market
In the ten months from the beginning of 2025, Dubai's real estate transactions reached 177,519, totaling AED 554.9 billion, indicating the robust strength of the city's real estate sector.
Key Sector Trends
- Ready Properties (Primary Market): Year-to-date, transaction value increased by 74% and the number of transactions by 63% compared to the previous year, leading the market.
- Off-plan Properties (Secondary Market): This sector also performed strongly, with transaction values increasing by 45% and the number of transactions by 52%.
In October 2024 alone, a gradual slowdown was observed overall, primarily due to an 18% decrease in transaction value and a 20% decrease in the number of transactions in the ready properties market. However, the overall market trend remains upward.
Active Transaction Areas
Particularly active areas for transactions included:
- Al Yelayiss 1: Transaction value increased by approximately 7%, while the number of transactions surged from just 3 to 153.
- Nad Al Sheba First: Ranked second, accounting for 9% of the total transaction value.
- Al Barsha South Fourth: Transaction value reached AED 1.4 billion in October 2024, a significant increase from AED 768 million in the same month last year.
- Burj Khalifa Area: Transaction value increased by 17% year-on-year.
Role of Mid-Income Buyers Driving the Market
Understanding the role of mid-income homebuyers is crucial for interpreting current market trends. Data from the mortgage market, in particular, clearly illustrates these tendencies.
Mortgage Market Data
In October 2024, 3,999 transactions for mortgages totaling AED 15.98 billion were recorded. Key highlights include:
- Increase in Transaction Volume: While the total loan amount decreased by 1% year-on-year, the number of transactions increased by 10%. This suggests that more buyers are entering the market at lower price points.
- Decrease in Average Loan Amount: The average loan amount per unit reached AED 4.17 million, a 16% decrease compared to October 2024.
Purchasing Trends Among Mid-Income Buyers
Data from mortgage applicants shows that individuals with a monthly income of AED 20,000 to AED 40,000 constitute approximately 30% of the total, making them the largest single income segment in the market. Characteristics of this segment include:
- Purpose of Purchase: 81% seek homes for self-occupancy, while 16% purchase for investment purposes.
- Property Type: Over 88% of purchased properties are apartments, indicating an overwhelming preference for affordable properties.
This data suggests that more residents are choosing to purchase affordable apartments to avoid rising rents and secure long-term assets.
Conclusion: Dubai Real Estate Market Enters a Mature Phase
Experts analyze that the current Dubai real estate market is entering a "mature phase," where an increase in transaction volume is driven by affordability and end-user demand, rather than speculative purchases of luxury properties.
The growing demand for apartments from mid-income buyers is a significant trend indicating market stability. More people are focusing on the practical and economic advantages of apartment living as a way to counter rising rents and build assets. This trend is expected to remain a crucial foundation for the Dubai real estate market moving forward.
Reference Article: Mid-income buyers in Dubai drive demand for more affordable apartments - Khaleej Times