The average prices of residential units (apartments and villas) in Dubai recorded a significant jump during the period between 2015 and 2024 (10 years) ranging between 11 and 145%, according to data from Asteco Real Estate Company.
The report indicated that the average prices of residential apartments in the emirate’s luxury areas increased by rates ranging between 11% in the Dubai Marina area from 1,600 to 1,775 dirhams per square foot, and 57% in Palm Jumeirah from 1,720 to 2,700 dirhams per square foot.
Prices in mid-income areas remain lower, down 7% in International City from AED 700 in 2015 to AED 650 per sq ft in 2024, 15% in Discovery Gardens from AED 850 in 2015 to AED 725 per sq ft in 2024, and stable in Jumeirah Village at AED 950 per sq ft. In the villa sector, average prices have increased by rates ranging from 27% in Damac Hills 2 (since 2018) from AED 650 to AED 825 per sq ft, to 145% in Dubai Hills Estate (since 2018), but stable in Jumeirah Village at AED 950 per sq ft.
2015
Dubai’s real estate market peaked in Q2 2014, before correcting afterwards, due to a combination of factors including lower loan-to-value ratios, lower oil prices and a strong dollar, while rental rates remained broadly stable, with new supply deliveries slower than expected.
2016-2020
The report found that 2016/17 saw a significant number of project launches, but new supply slowed significantly from 2018 to 2020, with residential supply gradually increasing over the years, from 13,750 units delivered in 2016 to over 34,000 apartments and villas delivered in 2020. Conversely, new office space completions declined from 4 million sq ft to 2.34 million sq ft, over the same period.
Additional supply also continued to have a downward impact on sales prices and rental rates, with average quarterly declines of 2% to 5% across all asset classes.
Despite prolonged economic pressures and the impact of Covid-19, the rate of decline in 2020 was broadly in line with previous quarters, and incentives offered by landlords such as rent-free periods and multiple cheque payments (up to 12 cheques) were widely accepted in the market.
The slowdown in new project launches and increased affordability of completed properties led to higher transaction volumes towards the end of 2020, ultimately leading to an increase in end-users and first-time buyers.
2021 – 2024
The report stated that Dubai’s real estate market witnessed a recovery in late 2020, with transaction activity gaining momentum and continuing to accelerate through 2024. This growth was driven by a combination of factors, including economic expansion, increased market confidence, infrastructure development, proactive government initiatives and spending.
During this period, the rate of new project launches and completions increased significantly, leading to a significant increase in transaction activity, particularly in the off-plan sector, which witnessed the largest growth, and the year itself was marked by significant increases in demand, occupancy levels and rental rates, particularly for prime residential.
The commercial sector kept pace with this activity, gaining significant momentum in 2023, which has continued to this point, driven in part by a significant shortage of new office stock.
Despite the challenging global economic landscape, Dubai’s economy has demonstrated resilience and achieved sustained growth. The economy has been bolstered by proactive government initiatives, strategic diversification, a strong tourism and trade environment, and a thriving real estate sector.
153 transactions in Q4
Dubai’s luxury residential property market reached unprecedented levels during 2024, setting a new record for home sales over $10 million (AED 36.7 million), according to the latest analysis from global real estate consultancy Knight Frank.
The total number of sales over $10 million in the emirate reached 435, surpassing the previous record of 434 transactions in 2023, reinforcing Dubai’s position as the world’s largest luxury property sales market.
Q4 2024 was exceptional, with 153 transactions, the highest quarterly figure recorded for the sector to date.
Most Attractive
According to Knight Frank, Palm Jumeirah remains the most attractive destination for luxury property sales, with 127 transactions, representing 29% of total transactions, worth $2.3 billion, or 32.5% of Dubai’s total property sales value in this category.
Palm Jebel Ali is quickly starting to attract investor interest, coming in second in terms of transaction volume with 36 transactions, reflecting the strong demand for luxury waterfront properties, with the first properties on Palm Jebel Ali expected to be delivered by 2027.
In terms of value, Emirates Hills came in second, with transactions worth $514.5 million, equivalent to 7.3% of the luxury market. Jumeirah Bay Island, District One and Dubai Hills Estate also performed strongly, accounting for 6.7%, 6.6% and 6.2% of the market, respectively.
Villa Demand
Villas accounted for 68.5% of all luxury property transactions, reflecting the strong growth in the sector, particularly with the rise in demand from high-net-worth individuals globally. In comparison, villas accounted for 52% of total property sales over $10 million in 2022 and 2023.
52% of all luxury property sales in 2024 were in the primary market (off-plan properties), with the top three developers (Omniyat, Nakheel and Emaar Properties) accounting for 46% of these sales, at 19%, 16% and 11% respectively.
Market recovery
The luxury real estate market, which includes the Palm Jumeirah, Jumeirah Bay, Jumeirah Islands and Emirates Hills areas, witnessed an increase in average selling prices during the fourth quarter of 2024, reaching AED 6,626 per square foot, an increase of 6%, compared to the fourth quarter of 2023.
Palm Jumeirah continued to dominate the luxury market, capturing two-thirds of the transactions, with 105 transactions, and the average selling price on the Palm reached AED 7,305 per square foot, recording an increase of 15%, compared to the fourth quarter of 2023.