Dubai real estate: Property sales surge 38% in first half of 2024

Dubai apartment prices have increased 17 per cent in past year and rents are up more than 20 per cent. Is it time to buy?  

Sales in Dubai’s residential property market experienced a substantial rise in the first half of 2024, as reported by Allsopp & Allsopp. The latest H1 report reveals that data from the Dubai Land Department shows the total sales value reached AED 190.4 billion, marking a significant 38 percent increase compared to the same period in 2023. Additionally, sales transactions grew by 36 percent, totaling 74,467.

Dominance of Apartments in the Market

Apartments remained the most popular property type, with sales increasing by 41 percent to 60,836 transactions, representing 82 percent of the total. This surge reflects the ongoing demand for high-density residential living, driven by the influx of expatriates and the city’s reputation as a global business hub. Key areas such as Downtown Dubai, Dubai Marina, and Jumeirah Village Circle saw the highest apartment sales, attributed to their modern amenities, strategic locations, and attractive investment returns.

Strong Performance in the Luxury Market

The luxury segment of the market also performed strongly, with 196 property deals exceeding $10 million, highlighting Dubai’s appeal to affluent global citizens. The report notes that over 72,500 residents in the emirate are now millionaires. Prime areas like Palm Jumeirah, Emirates Hills, and Downtown Dubai continue to attract high-net-worth individuals seeking exclusive properties with premium amenities and privacy.

Record Off-Plan Sales

Off-plan sales saw a major leap, reaching a record 45,271 transactions worth AED 96 billion, a 55 percent increase year-on-year. To meet this demand, developers delivered 20,652 new units in the first half of the year, a 93 percent increase compared to the same period in 2023. Additionally, 47,792 off-plan properties were launched onto the market. This surge in off-plan sales indicates strong investor confidence in Dubai’s real estate market, with many buyers looking to capitalize on the city’s growth potential and lucrative rental yields.

Continued Demand and Upward Momentum

With 50,000 additional people relocating to Dubai in the first six months of 2024, demand continues to outstrip supply by a ratio of 2:1. This trend suggests that the upward momentum in the market is likely to continue for the rest of the year, according to Allsopp & Allsopp. Factors contributing to this growth include favorable government policies, a robust economy, and a high quality of life that attracts international talent and investment.

Sector-Specific Insights

The report also highlights sector-specific insights, showing that the commercial real estate sector experienced mixed results. While office space demand remained high with a 19 percent year-on-year increase in transactions and nearly a 20 percent rise in average price per square foot, the hotel apartment segment saw a significant reduction in transactions. However, excluding hotel apartment transactions, there was a 17 percent increase in commercial sales, reaching a total value of AED 7.49 billion, a 31 percent year-on-year increase.

Rental Market Dynamics

Despite a reduction of 3,355 rental transactions, rental prices showed increases across key segments. Office rents rose by 20 percent year-on-year, retail rents by 11 percent, and warehouse rents by almost 19 percent. The top five communities by sales transactions for offices were Deira, Dubai Investment Park (DIP), Business Bay, Dubai Industrial City, and Business Bay. Retail sales transactions were highest in Deira, Bur Dubai, International City, Jumeirah Lake Towers (JLT), and Jumeirah Village Circle (JVC).

Future Outlook

The outlook for Dubai’s real estate market remains positive, with ongoing infrastructure developments, such as the expansion of the metro network and new mixed-use projects, expected to drive further growth. As Dubai continues to position itself as a leading global city, the real estate sector is set to benefit from sustained investor interest, a diverse population, and strategic economic initiatives.