Dubai residential real estate sales prices and volumes rose in 2023, stated CBRE Middle East, which also reviewed office, retail, and industrial property trends.
Dubai property prices surged by an average of 20% in Q3 2024, with total residential sales reaching AED120bn ($32.4bn), as per CBRE’s UAE Real Estate Market Review.
The residential market in Dubai showed a strong performance in Q3 2024, with a nearly 20% price increase compared to the previous year.
This rise was driven by a 19% growth in average apartment prices and a 23% increase in villa prices.
Dubai real estate sales and rents.
Over the year to September 2024, rental growth remained steady with average apartment rents up 19% and villa rents rising by 13%.
Registered rental contracts grew year-on-year, primarily due to a 14% increase in renewal contracts, while new registrations saw a slight decline.
Dubai’s transaction volumes continue to climb, fueled by the growth in off-plan sales.
In the nine months to September 2024, residential transactions exceeded 125,000, marking a 36% rise compared to the same period in 2023.
Residential sales values also increased, totaling AED86bn ($23.4bn) for off-plan transactions and AED33bn ($9bn) for ready properties.
Q3 recorded AED120bn ($32.4bn) in residential sales, a 30% increase from the same period last year. Due to the limited supply, the residential market in Dubai is expected to maintain positive momentum for sales and rentals in the coming quarters.
In the office sector, activity remained high amid a strong non-oil economy, driving employment and boosting commercial Ejari lease registrations.
With limited new office supply this year, Dubai’s office market will remain landlord-friendly, pushing occupancy rates and rents higher.
As of Q3, the average office occupancy rate tracked by CBRE stood at 93%, up from 92% a year ago.
Office rental rates continued to rise, with Prime, Grade A, Grade B, and Grade C rates growing by 11%, 21%, 24%, and 19% respectively compared to Q3 2023.
The hospitality sector also set new visitor records in 2024, with Dubai expected to reach its highest annual total if current trends continue.
Dubai’s Real Estate Boom.
Between January and June 2024, international visitors to Dubai grew by 9.9%, reaching 8.12m. Average daily room rates (ADRs) showed a 3% year-on-year increase through September.
The retail market remained strong, with limited supply and high occupancy rates pushing rental rates higher.
Retail supply in Dubai is tight, with most prime properties near full capacity and some having waiting lists for tenants.
Retail rents continued to rise, with average rates up nearly 3%.
Short to medium-term retail supply lags behind historical delivery trends, with several large-scale mall projects facing delays and redesigns.
As a result, retail rental rates are expected to grow, though the number of completed transactions remains low. Registered Ejari leases saw little growth quarterly or annually due to supply constraints.
New Ejari leases dropped by 7% year-on-year, reflecting the tight market conditions.
The industrial and logistics sector benefits from positive fundamentals, leading to more aggressive pricing by landlords, especially in prime areas of North Dubai.
However, the lack of quality assets ready for lease is limiting market activity, making lease negotiations challenging for corporate occupiers.
In Q3, industrial Ejari registrations rose by 5% year-on-year, with new leases up 4% and renewals by nearly 6%.
Matthew Green, Head of Research MENA in Dubai, commented: “The UAE real estate market has performed well in Q3, with residential activity reaching new highs, while the commercial office market has seen steady growth in rental and occupancy rates as demand exceeds supply.”
“The limited short-term pipeline remains a challenge for several sectors, increasing the cost of living and doing business across the Emirates.”
“However, despite this concern, the non-oil economy remains strong, supporting further real estate growth in the next 12 months.”
