Why Buying a Villa is a Better Choice Than an Apartment

Dubai’s real estate market has experienced significant growth in recent years, particularly in the off-plan apartment segment. Since 2022, a remarkable 219,000 off-plan apartments have been sold, compared to just 108,000 existing (ready) apartments. This means the sale of off-plan units is now double that of transactions for ready-to-move-in homes. Questions around this segment are increasing, especially now that average yields are around 5%, while banks are offering up to 4.5% interest on savings.

The biggest problem? The majority of off-plan apartment buyers are investors (approximately 99%), who intend to rent or sell the units upon completion. With a rising supply and a saturated rental market, it is taking increasingly longer to get apartments rented. Landlords with multiple units report that vacancy rates are increasing, and pressure on rental prices is growing.

Villas and Townhouses: Limited Supply, Strong Demand, and Less Rental Pressure

In contrast to apartments, villas and townhouses are actually scarce. Since 2022, only 33,000 off-plan villas have been sold, while a substantial 75,000 existing villas and townhouses have been traded. The market for ready villas is therefore about 2.5 times larger than that for new builds. And this is not without reason.

Good villas are hard to find: the right size, good finishing, in an established neighbourhood and at a reasonable price. But those who find one often face less competition. Between 25% and 40% of villa buyers purchase not as an investment, but to live in themselves. This means a large portion of the new supply does not enter the rental market, and therefore experiences less price pressure.

For investors and buyers who value long-term stability and limited vacancy, villas therefore offer a more attractive perspective than apartments. Especially now that apartment yields are approaching savings interest rates, the choice for quality over quantity is becoming increasingly relevant.