Are you searching to buy or put money into Dubai’s property market but finding it tougher because of growing prices? You’re not alone in this case. There is no need to feel alone in this case. Over the beyond year, Dubai’s real property market has experienced a huge surge in property prices. Average prices jumped by 20% in just one year, making it a difficult market for buyers and renters. This article provides information about how the market accomplished in Q3 of 2024, and provides key insights into the performance of residential profits, rents, place of business space, retail, and industrial properties.
Dubai Real Estate: Average Property Prices Surge Via 20% In A Year As Q3 Sales Pass $32 Billion
Dubai Property Market Overview
Dubai’s real estate market saw total residential sales top AED120 billion ($32.4 billion) in the third quarter of 2024. This marks an increase of over 30% compared to the same period in 2023. The residential market continues to perform well, driven by sustained demand and a limited supply of available properties. In particular, apartment prices rose by an average of 19%, while villa prices increased by an impressive 23% compared to the previous year. This rise in property values has been a key factor in driving overall market growth and attracting both local and international buyers.
Residential Sales Performance
In the first nine months of 2024, residential sales transaction volumes increased significantly, with more than 125,000 transactions recorded. This represents a 36% increase in the number of transactions compared to the same period in 2023. The market continues to see robust activity, particularly in off-plan sales, which accounted for AED86 billion ($23.4 billion) in transactions during Q3. Meanwhile, ready properties contributed AED33 billion ($9 billion) to the total sales volume.
With such strong growth, it’s clear that buyers remain confident in Dubai’s long-term property prospects, despite higher prices and growing competition for available properties.
Rental Market Trends
Dubai’s rental market has also seen notable growth, with average apartment rents increasing by 19% and villa rents rising by 13% over the past year. The demand for rental properties remains strong, particularly as new residents move into the city. Although new rental contract registrations saw a slight decline, renewal contracts increased by 14%, highlighting the willingness of existing tenants to remain in their current homes despite rising costs. This trend reflects a broader dynamic in the rental market, where limited supply continues to push up prices, especially in prime residential areas.
Tenants renewing their leases are often facing higher rental rates, as landlords adjust prices to reflect the increased demand.
Also Read: Dubai: Not Enough Villas In The Market? Developers Explain Why
Commercial Office Market Performance
Dubai’s commercial office market is thriving, with high demand for office space being driven by the growth of the non-oil economy. The limited supply of new office developments is making it a landlord-friendly market, with occupancy rates rising to around 93% by the end of Q3 2024, up from 92% the previous year. Average rental rates for Prime, Grade A, Grade B, and Grade C office spaces have seen growth of 11%, 21%, 24%, and 19%, respectively. This upward trend reflects the high demand for quality office space in well-located areas, with new leases often being signed at premium rates.
As businesses expand and employment increases, the need for more office space will likely continue to put pressure on the limited supply, leading to further rent hikes in the coming months.
Retail Market Trends
Dubai’s retail sector continues to perform well, with high occupancy rates and limited supply driving rental growth. The city’s prime retail assets are operating at nearly full capacity, and many have waiting lists of potential tenants looking to secure space. Retail rents increased by nearly 3% in Q3 2024, and this trend is expected to continue into 2025. Due to delays in the delivery of large-scale retail projects, the availability of new retail space remains tight.
This has created a competitive environment for tenants, with landlords taking advantage of the supply-demand imbalance to raise rental prices. The lack of new retail space in the pipeline means that rents could rise further in the coming quarters, particularly in popular shopping areas.
Hospitality Sector Growth
Dubai’s hospitality industry is on track to achieve record-breaking visitor numbers in 2024, with international arrivals increasing by 9.9% in the first six months of the year. By June 2024, the total number of visitors had reached 8.12 million. As a result, the average daily room rate (ADR) increased by 3% year-on-year, indicating the continued demand for hotel accommodations in the city. The surge in tourism is supported by Dubai’s growing reputation as a global destination for business, leisure, and events.
As the year progresses, the hospitality sector is expected to deliver even stronger results, with more visitors anticipated in the final quarter of 2024.
Industrial And Logistics Market Performance
Dubai’s industrial and logistics sector is also seeing positive momentum, with rising demand for space in key locations across the city. In particular, North Dubai has become a hotspot for industrial real estate, where rental rates are increasing as landlords respond to the growing demand. However, the market is facing challenges due to the limited availability of quality assets for lease. Despite these challenges, industrial Ejari registrations saw a 5% increase year-on-year during Q3 2024, with new leases up by 4% and renewals rising by 6%. The demand for industrial space is expected to remain strong, particularly as businesses look for modern facilities to support their operations.
Outlook For Q4 And Beyond
The outlook for Dubai’s real estate market remains positive, with continued growth expected across residential, commercial, retail, and industrial sectors. However, the lack of available supply in many areas, combined with rising prices, is likely to present challenges for both buyers and renters in the coming months. Residential prices and rents are expected to continue their upward trajectory as demand remains strong and new property developments take time to come online. Similarly, the commercial office market will continue to be landlord-friendly, with rising occupancy rates and rental prices.
In the retail sector, limited supply will likely drive further rent increases, while the industrial market will see sustained demand for space in key locations. Overall, the Dubai real estate market is set to remain highly competitive in the near term, with limited supply and rising prices being the key themes across all sectors.
Arshad Darbar’s Thoughts
Arshad Darbar, a seasoned expert in the real estate market, believes that the recent surge in Dubai property prices reflects a strong and growing demand for real estate. According to Darbar, the 20% rise in property values over the past year indicates a positive shift for investors and homebuyers alike, particularly as Dubai continues to position itself as a global hub for business and luxury living. He highlights that the increasing demand for residential units, both apartments and villas, points to Dubai’s appeal as a long-term investment destination. Darbar also emphasizes that while prices are rising, there are still attractive opportunities for buyers who seek strategic investments.
The growing popularity of off-plan properties, along with a strong rental market, offers investors various avenues to maximize returns. He notes that with Dubai’s robust infrastructure and expanding economy, the real estate market is expected to remain buoyant in the coming years. Additionally, the rise in office and industrial rents shows a steady increase in commercial demand, further enhancing Dubai’s position as a thriving economic center. Darbar remains optimistic about the future, stating that the market is primed for sustained growth across multiple sectors.
Conclusion
Dubai’s real estate market has seen significant growth across all sectors in 2024, with average property prices rising by 20% and total residential sales exceeding $32 billion in the third quarter alone. The commercial, retail, and industrial sectors are also experiencing rising rents and limited supply, making it a challenging environment for tenants and buyers alike. As demand continues to outstrip supply, prices are expected to rise further in the coming months, making it increasingly difficult to find affordable options in the market.
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