Dubai Real Estate Market: Growth Trends and Investment Opportunities in 2024
Dubai’s real estate market is experiencing a remarkable surge, positioning itself as a prime destination for investors and businesses. The latest data from the ValuStrat Price Index (VPI) highlights substantial growth across residential and commercial sectors, reaffirming the city’s status as a global real estate powerhouse.
Key Metrics Show Robust Growth
The ValuStrat Price Index (VPI) is a comprehensive valuation-based price index that tracks periodic changes in capital values and rental values for typical residential and commercial properties. According to the VPI, Dubai’s real estate market witnessed a 6.4% quarterly increase in capital values and a 24.7% annual increase, reaching 167.5 points compared to the base of 100 points in Q1 2021.
Residential Sector Performance
In the residential segment, the VPI for capital values surged by 6.4% quarterly and 24.7% annually. This growth was driven by a 5.7% quarterly and 20.1% annual increase in apartment valuations, propelled mainly by mid-affordable communities. The top-performing areas included Discovery Gardens, The Greens, Palm Jumeirah, The Views, Town Square, Al Quoz Fourth, and Dubai Production City.
Apartment Valuations
- Discovery Gardens: 32.6% annual increase
- The Greens: 29.8% annual increase
- Palm Jumeirah: 29% annual increase
- The Views: 24.8% annual increase
- Town Square: 24.5% annual increase
- Al Quoz Fourth: 24.1% annual increase
- Dubai Production City: 23.9% annual increase
Villa Valuations
Villas remained resilient, achieving 211 points with a yearly increase of 29.6%, reaching a 10-year high in prime villa values. In Q1 2024, villa valuations grew by 7.7% quarter-on-quarter. The highest annual performers were Jumeirah Islands, Palm Jumeirah, Dubai Hills Estate, and Mudon.
- Jumeirah Islands: 32.2% annual increase
- Palm Jumeirah: 31.9% annual increase
- Dubai Hills Estate: 30.6% annual increase
- Mudon: 27.2% annual increase
Office Sector Surge
The office sector witnessed a remarkable upswing, with office unit valuations soaring by 29.9% annually, reflecting sustained demand for premium office spaces. This marked the 12th consecutive quarter of growth, with the VPI for office capital values reaching a record 194.2 points, almost double the 100-point base set in Q1 2021. The top-performing business districts were DIFC, Jumeirah Lake Towers, Business Bay, and Barsha Heights.
Office Valuations
- DIFC: 38.7% annual increase
- Jumeirah Lake Towers: 36.1% annual increase
- Business Bay: 33.3% annual increase
- Barsha Heights: 24.2% annual increase
Prime Property Market
Prices of prime properties in Dubai grew by 26.7% year-on-year and 7.3% quarter-on-quarter, setting a new record of 173 points. Highly desired prime villas reached a new 10-year high of 211.8 points with capital gains of 33.1% year-on-year and 8.5% quarter-on-quarter. Luxury apartments also showed impressive growth, with capital gains leaping 21.6% annually and 6.2% quarter-on-quarter.
Rental Market Dynamics Vs. Dubai real estate
Residential asking rents jumped 11.7% compared to the same period last year and 3% since the previous quarter. Apartment asking rents grew by 16.4% year-on-year and 4.4% quarter-on-quarter, reaching an average of Dh85,800. Villa rentals rose 1.3% quarterly and 6.1% annually to an average yearly rent of Dh403,800. Residential occupancy in Dubai was estimated at 87.7% during the first quarter.
New Builds and Off-Plan Market
The estimated number of new build units to enter the market this year stands at 46,558 homes. Total estimated completions as of the first quarter stood at 5,770 apartments and 1,038 villas, equivalent to 15% of preliminary estimates for the whole of 2024. A total of 85,999 apartments and 21,230 villas are currently under construction with promised handovers by 2028.
Off-Plan Market Vs. Dubai real estate
The average ticket size of off-plan homes rose by 5.3% annually to Dh2.7 million. The citywide average transacted price for off-plan properties was Dh19,978 per sq m (Dh1,856 per sq ft). Off-plan Oqood (contract) registrations grew by 20.3% year-on-year and 63.1% quarter-on-quarter, equivalent to investments worth Dh55.3 billion.
Expert Insights
“The latest data from the ValuStrat Price Index highlights the strength and dynamism of Dubai’s real estate market. With steady growth across residential, office, and industrial sectors, Dubai continues to attract investors and businesses, positioning itself as a premier destination for real estate investment in the region,” said Haider Tuaima, director and head of real estate research at ValuStrat.
Nautilus Properties: Your Partner in Dubai Real Estate
With over 30 years of experience, Nautilus Properties is dedicated to offering clear, seamless, and individualized real estate services. Specializing in high-end residential properties, including villas, townhouses, apartments, penthouses, mansions, and plots, we focus on prime areas such as Downtown, Meydan, Emirates Hills, Emirates Living, Dubai Hills, Palm Jumeirah, Dubai Creek Harbour, Arabian Ranches, Dubai Marina, and Business Bay.
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