As the first half of 2024 comes to a close, Dubai’s property market continues to demonstrate strong growth, marked by a significant influx of foreign buyers, absorption of existing inventory, and a shift towards suburban areas, as reported by real estate firms.
One notable area benefiting from this trend is the Damac Hills district. The Damac Hills district guide in Dubai highlights its appealing mix of luxury amenities and spacious living options. With its growing popularity, more investors are exploring opportunities in this vibrant community.
Post-New Year Stability and Rising Prices
In early 2024, property prices in Dubai’s prime areas have continued to rise, challenging expectations of a slowdown. Despite price hikes, Dubai remains an affordable luxury real estate destination, attracting investors globally. Bayut’s report reveals increased interest in affordable properties in areas like International City and Dubai South, while mid-range buyers prefer Jumeirah Village Circle and Al Furjan. Luxury investors are drawn to Dubai Marina and Business Bay.
Record Growth in Sales Volume
In the first half of 2024, Dubai’s property sector experienced a year-on-year growth in sales volume exceeding 30%, as reported by Property Monitor. May 2024 was a record-breaking month for sales transactions in Dubai, with Property Monitor noting a 47.7% month-on-month increase and a 45.9% year-on-year rise in transaction volumes. Haus & Haus also reported that May was their best-performing month, likely due to delayed transactions from April caused by unprecedented storms and flooding in Dubai.
Growing Demand for Villas
As Dubai’s population expands and matures, the demand for villas is steadily increasing. According to Property Monitor’s figures for the first half of the year, there has been a notable rise in villa sales, fueled by residents seeking family-friendly, long-term living solutions.
In response, developers have launched 3,323 villas in the first half of the year, with many slated for completion by 2028. Emaar has announced major master community projects such as The Oasis, The Heights Country Club and Wellness, and Grand Polo Club & Resort, capturing strong investor interest.
Elevated Demand for New Real Estate Projects
Since 2022, over 80% of newly launched property units in Dubai have sold out, underscoring the high demand for off-plan projects. Data from the Dubai Land Department reveals that nearly 214 projects have been launched, with 148 currently active. Taimur Khan, head of research for CBRE in the Middle East, highlighted that despite concerns about an oversupply affecting prices, the absorption of new stock remains robust, with at least 70% of units launched since 2022 already sold.
Record Transaction Volumes
Data from Bayut’s Dubai transactions, which utilizes information from the DLD, indicates that the first half of 2024 saw 43,075 property sale transactions. These deals amounted to a total value of Dhs122.9bn, covering both residential and commercial properties.
Shifts in Price Brackets
CBRE reports a notable shift in market dynamics during the first half of 2024, with changes in transaction price brackets. Transactions below Dhs1,000 per square foot decreased by 19.3% in May 2024 compared to the previous year. However, transactions in the Dhs1,000 to Dhs2,000 per square foot range surged by 64.1%, and those in the Dhs2,000 to Dhs3,000 per square foot bracket increased by a substantial 154%.
The higher-end segment, priced between Dhs3,000 and Dhs8,000 per square foot, experienced a 19.5% decline in activity due to limited stock availability. Properties priced above Dhs8,000 per square foot represented just 0.2% of total sales in May 2024, according to CBRE data.
Rise in Rental Prices
Transactional rental prices in affordable neighborhoods for both villas and apartments have generally increased by 2% to 9%. Mid-tier segment apartment and villa rentals have reported increases of up to 10%. In the luxury real estate segment, transactional prices for both apartment and villa rentals have also risen by up to 10%.
Commenting on the findings, Haider Ali Khan, CEO of Bayut and head of Dubizzle Group MENA, stated, “Amidst the global economic slowdown and rising interest rates, we have observed a trend of investors worldwide gravitating towards wealth-preserving assets. Dubai’s real estate sector emerges as a standout choice in today’s economic climate, with prices and consumer interest continuing to rise even after a 24-month period of continuous growth.”
