Dubai Property Sales Fall 47%: What’s Driving the Shift

SPEAKER_1 (0:00)

It's the Morning Drive, talking real estate, Debye's residential markets. It recorded 72.6 billion dirhams in sales in Q3. Summer, across around 34,000 transactions. Sales values were down 47%.

Transaction volumes fell 38% year on year. And off-plan property still dominated 72% of purchases. So what do those numbers tell us about Debye's property market? Zacky Sajjad is the Director of Business, Development and Client Relations at the Property Consultancy, Cavendish Maxwell, back a second time in just over a week.

Zacky Sajjad (0:37)

Yeah, can't stay away.

SPEAKER_1 (0:38)

I know, good to see you. We've saved you a seat out there, I think, these days. Zacky, nice to see you. Your latest research is out. So this is kind of a Debye Property Sales Q3 review. It's a bit like a, almost like a school report, a scorecard, really, isn't it, in a way?

But this is the summer specifically, so I wanted to just point that out at the outset. First thing, what's the biggest take away from the numbers for you?

Zacky Sajjad (1:05)

Look, I think what we've got to sort of, we have to contextualize what's been happening. We've had a period of sort of five years of exceptional growth. So I think what we're beginning to see is a normalization after this several years of exceptional growth. So there's that element to the numbers. Obviously, there is important to highlight that, despite the fact that we are sort of down by the value of the transactions in Q3, there's still 72.6 billion Durham's worth of transactions that took place, which is not an insignificant amount of money.

So there is that. Also, we have to sort of remind everybody that there's often a lag in the data. And we'll probably come to this later on when we talk about it.

Off plan versus ready units, it can take sometimes three months plus for a developer to register that transaction. So there is often a lag with some of this data. So it's important to sort of look at it from a yearly perspective, really, rather than just the quarter by quarter dynamics.

SPEAKER_1 (2:22)

Yeah, for sure. So this is essentially, this is what, July, August, September data.

Zacky Sajjad (2:27)

Exactly.

SPEAKER_1 (2:28)

But if there's a three month lag, that's not going to be in effect until December, but actually it relates to Q3 data.

Zacky Sajjad (2:35)

Yeah.

SPEAKER_1 (2:35)

Yeah, OK. And I'm with you.

Zacky Sajjad (2:37)

And then obviously we had some, you know, the sort of height of the geopolitical tensions throughout Q2. So some of this may be linked to that as well.

SPEAKER_1 (2:47)

Got you. What the data reveals is sales values down 47% year on year, transactions down 38%.

What's driving the change?

Zacky Sajjad (2:59)

Look, I think, again, as I sort of said earlier, we've had exceptional growth over the last number of years. I mean, just to sort of, you know, average. I mean, it wasn't unusual last year to see, you know, close to 20,000 transactions a month, you know, in the residential market.

SPEAKER_1 (3:16)

And we used the word gangbusters all the time, and I know that it's almost flippant, but it's true.

Zacky Sajjad (3:21)

Well, it was a bull run. Yeah, it really was. It really was. So, you know, if we look pre-pandemic, you were probably getting, you know, around 50,000 transactions annually, you know. So we're still, if we go back to what historically we had, we're still at quite a high base, but we had a record year in 2025

We had a record year in 2024 So, you know, off the back of these high volumes that we've got used to, that is part of the reason we're seeing a, I would call it more of a normalization.

SPEAKER_1 (3:56)

We've had a number of property real estate commentators come in and use words like normalization, stabilization or slight reset, rather than correction, because it isn't a correction of sorts.

Zacky Sajjad (4:10)

Look, I mean, look, there's no getting away.

Recent geopolitical events have had an impact.

However, even last year, most of us in the industry were feeling it was getting a bit frothy. The market was getting a bit frothy. And given the number of launches and the volume of off-plan transactions, it was sort of, and the supply that was kind of coming, if you like, because this has been something that's been going on since the pandemic. So pretty much since sort of 2022 onwards, there was a feeling that perhaps at some point, if not this year, certainly in 2027, we were going to see a softening in the market. I think the geopolitical events have kind of fast-tracked that somewhat. But I think, again, what's fairly positive, if we were to look at other external major economic events that took place, that had an impact on the real estate market here. For example, the global financial crisis, when it really hit here in Dubai, the sort of values dropped off a cliff in the short term very, very quickly. If we look at what happened after the sort of price of oil sort of collapse and the Arab Spring that followed it, it was more of a softening. It was kind of between, say, 2015 and it bottomed out in the height of the pandemic in 2020 It was a sort of a real soft, gradual, kind of somewhat depreciation, if you like. However, as I've sort of said many times, real estate is a long-term investment. And so when you look at it from the perspective of all the stakeholders involved in it, Dubai has done such a remarkable job of creating this metropolis that we all live in today. And they're not just sort of resting on the laurels, they're moving forward. They've got very ambitious plans. The 2040 Urban Master Plan, population targets of nearly 6 million people by the year 2040 So even during that period of 2015 to 2020, some people will be looking at some of these master communities that were coming on, huge communities like Dubai Hills Estate or Al-Fajan and thinking, who's going to live there? Fast forward post-pandemic and no one could find a villa to rent or there was this bull around the market because of the appetite for that product. So I think we've got to put it into context that as much as we've had this rapid growth over this last five year period, there is also an ambition to go even beyond with Dubai's Urban Master Plan, the D33 agenda.