During Q1 2024, the Dubai real estate market witnessed significant growth across its residential and commercial sectors, revealed the latest data from the ValuStrat Price Index (VPI).
In the residential segment, the VPI for capital values surged by 6.4 per cent quarterly and 24.7 per cent annually, reaching 167.5 points, compared to the base of 100 points in Q1 2021. This growth was driven by a 5.7 per cent quarterly and 20.1 per cent annual increase in apartment valuations, propelled mainly by mid-affordable communities.
The resilient residential sector
Apartment unit valuations continued to rise, increasing by 5.7% quarterly and 20.1% compared to the same period last year. The VPI reached a record high of 139.2 points, driven by mostly mid-affordable communities. The top annual performers were Discovery Gardens (32.6%), The Greens (29.8%), Palm Jumeirah (29%), The Views (24.8%), Town Square (24.5%), Al Quoz Fourth (24.1%), and Dubai Production City (23.9%).
In Q1 2024, Dubai’s prime villa market proved its resilience by achieving 10-year high values, with a substantial yearly increase of 29.6%. The office sector also experienced a significant upswing, with office unit valuations rising by 29.9% annually, reflecting a strong demand for premium office spaces. Villa valuations saw quarterly growth of 7.7%, with top performers including Jumeirah Islands, Palm Jumeirah, Dubai Hills Estate, and Mudon, all-seeing impressive annual increases ranging from 27.2% to 32.2%.
Prices of prime properties in Dubai have seen significant growth, with a 26.7 per cent year-on-year increase and a 7.3 per cent quarter-on-quarter rise, reaching a new record of 173 points. Prime villas have reached a 10-year high with capital gains of 33.1 per cent year-on-year and 8.5 per cent quarter-on-quarter, hitting 211.8 points. Luxury apartments are also performing well, with capital gains of 21.6 per cent annually and 6.2 per cent quarterly, reaching a new price record of 149.4 index points.
The average ticket size of off-plan homes rose 5.3 per cent annually to $735,000 (AED 2.7 million). The citywide average transacted price for off-plan properties was $634 (AED 1,856) per square foot. Off-plan Oqood (contract) registrations grew by 20.3 per cent year-on-year and 63.1 per cent quarter-on-quarter, equivalent to investments worth $15 trillion (AED 55.3 billion).
The report stated that 46,558 new build units are expected to enter the market this year. As of the first quarter, there were 5,770 apartments and 1,038 villas completed, which is 15% of the estimated total for 2024. Additionally, a total of 85,999 apartments and 21,230 villas are currently under construction, with plans for handover by 2028.
The robust office market
Office unit valuation in Dubai has increased by 29.9% annually and 4.3% quarterly, marking the 12th consecutive quarter of growth. This reflects a strong demand for high-quality office space in well-connected locations in the city. The ValuStrat Price Index for Dubai’s office capital values has reached a record 194.2 points, nearly double the base of 100 points set in Q1 2021.
The weighted average price for office space in Dubai was $507 (AED 1,482) per square foot. Significant annual growth was reported in five major central business districts, with DIFC experiencing a 38.7% increase, Jumeirah Lake Towers seeing a 36.1% growth, Business Bay registering a 33.3% rise, and Barsha Heights observing a 24.2% increase. These figures reflect the continued double-digit growth in Dubai’s office real estate market.
“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,” mentions Haider Tuaima, director and head of real estate research at ValuStrat.
For a detailed perspective on the property market, visit: Dubai - Real Estate Review Q1 2024
