Dubai’s real estate market is witnessing a continuous brilliance in all its residential, commercial, hotel and industrial sectors, supported by strong population growth, increasing demand, and limited supply. During 2024, the emirate’s population will exceed 3.83 million people, with an increase of 170,000 new residents, which is the highest population growth rate since 2018.
A recent report by research and consulting firm ValuStrat indicates that the gap between supply and demand has contributed to a significant increase in property prices, with sales of ready units reaching unprecedented levels. Other economic sectors, such as hospitality, retail and offices, have also maintained strong momentum, reflecting Dubai’s continued appeal as a global destination for investment, living and work. Initial estimates indicate that 58% of the expected residential supply has been delivered, with nearly 27,000 homes completed in 2024 – the lowest level in six years.
ValuStrat’s price index reported year-on-year increases in capital value across key sectors: apartments were up 23.6%, villas 31.6%, offices 23.9% and warehouses 15%. Annual rents were also up, with villas up 5.8%, apartments 13% and offices 22.5%. With 155,000 hotel rooms, the hospitality sector performed exceptionally well, with occupancy at 78% and revenue per available room up 2.8%.
Index
The ValuStrat Price Index, which measures a sample of properties representing 95% of Dubai’s freehold market, rose 5.6% quarter-on-quarter and 27.5% year-on-year to 200.7 points, double the baseline of 100 points as of Q1 2021.
In Q4 2024, villa capital gains slowed, with the Value Price Index reaching 259 points, representing a year-on-year increase of 31.6% and a quarter-on-quarter growth of 6.5%, with the best annual performance being villas in prime locations such as Jumeirah Islands.
(42.5%), Palm Jumeirah (42.3%), Emirates Hills (32.3%), and Dubai Hills Estate (32.1%).
Apartments witnessed an annual growth rate of 23.6% and a quarterly growth rate of 4.7%, with the highest annual capital gains achieved in The Greens (31%), Palm Jumeirah (28.3%), The Views (27.1%), Town Square and Discovery Gardens at 26.4%.
Valuations of highly sought-after luxury properties, known for their exceptional views, amenities, facilities and design, rose by 29.9% year-on-year and 6% quarter-on-quarter, with sustained demand underscoring the enduring appeal of Dubai’s luxury property market.
The luxury villa market rose to 266.3 points, achieving annual capital gains of 36.5% and quarterly growth of 7%. All villa communities monitored have doubled in value since the pandemic, with Jumeirah Islands now three times its pre-pandemic level.
Luxury apartments in Dubai continued to grow, with capital values up 24.4% year-on-year, and 5% since Q3, to 174.9 points.
Market offer
Official statistics show that Dubai began 2024 with 812,463 existing residential units, of which an estimated 29,957 homes have been completed, including 20,066 apartments and 6,891 villas, accounting for more than half of the expected deliveries for the entire year.
There are currently 118,401 apartments and 28,351 villas and townhouses under construction in Dubai, scheduled for delivery by 2028, of which 12% are located in Jumeirah Village Circle, with 8% in Business Bay, followed by Jumeirah Lakes Towers at 5%.
Rentals
Villa rents recorded relatively modest increases of 1.7% QoQ and 5.8% Y-o-Y, with the average annual rent reaching AED 421,800. Apartment rents rose by 1.9% QoQ and 13% Y-o-Y, with the average annual rent reaching AED 92,900. Residential occupancy in Dubai was estimated at 88.8%.
Offices
Demand for office space in Dubai remains strong, with capital values up 5.8% QoQ and 23.9% YoY. The ValuStrat Office Capital Values Index (VPI) reached a record high of 230.6, more than double the 100-point baseline set in Q1 2021.
The average valuation of office space was AED 1,760 per square foot, with the highest office valuations recorded in Downtown Dubai at an average of AED 3,983 per square foot, while the lowest valuations were in Barsha Heights at an average of AED 1,200 per square foot.
All five of Dubai’s central business districts recorded double-digit annual capital gains: Dubai International Financial Centre (DIFC) led the way with growth of 38.8%, followed by Barsha Heights (34.8%), Business Bay (22.2%), Jumeirah Lakes Towers (21.2%) and Downtown Dubai with the lowest growth rate of 12.2%.
As of Q4 2024, Dubai’s total office stock is estimated at 102 million sq ft, and based on developer estimates, 2.5 million sq ft of gross leasable area is scheduled to be completed by the end of 2025.
Retail
During the first three quarters of 2024, Emaar’s revenue from shopping malls operations amounted to AED 4.2 billion, and Emaar Properties witnessed its major shopping mall assets achieving occupancy rates 99%, during the first three quarters of 2024.
Dubai Mall recorded a footfall of 82 million during the first nine months of 2024, and Emaar announced a 6% growth in sales performance for its tenants, while Majid Al Futtaim witnessed its commercial assets achieving an occupancy rate of 96%, and Majid Al Futtaim Retail witnessed an 8% growth in revenues on an annual basis from shopping malls.
The UAE e-commerce market is expected to exceed AED 48.5 billion by 2028, with an expected penetration rate of 15.3%.
Meanwhile, Al Khail Avenue, a shopping mall developed by Nakheel in Jumeirah Village Triangle, is nearing completion and will add 1.5 million square feet to the city’s shopping mall inventory.
Shamal Holding has also contracted McLaren Construction to build the Nad Al Sheba Gardens shopping mall, which will feature two-storey retail, food and beverage and cafe space covering a land area of approximately 135,625 square feet.
Hospitality
The total number of international guests in Dubai reached 16.79 million during the first 11 months of 2024, a growth of 9.2% year-on-year, while the hotel occupancy rate reached 78%, an increase of 0.8% year-on-year.
The average daily rate was AED 520, up 2.0% year-on-year, while revenue per available room (RevPAR) grew by 2.8% year-on-year to AED 405.
The top three source markets for tourists to Dubai were: Western Europe, which contributed 19%, countries in South Asia, which added 16%, and the GCC, which contributed 15%. The average occupancy of holiday homes during the fourth quarter was 58%.
As of November 2024, the total number of hotel rooms in Dubai reached 127,023 rooms and 26,367 hotel apartments, according to the Department of Economy and Tourism.
Notable hotel openings included the Emirates Sports Hotel, which has 144 rooms, 40 hotel apartments and 8 penthouses, the Delano Hotel Dubai, which has 251 rooms and 84 suites, and the Jumeirah Marsa Al Arab, which has 303 rooms, 84 suites and 82 apartments.
Kleindienst Group has announced plans to add 5,000 five-star hotel rooms to Dubai’s hospitality sector, while Omniyat has announced the planned launch of Alba, a Dorchester Collection hotel on Palm Jumeirah, scheduled to open in 2028.
There are 11 hotel projects under construction with a total of 4,248 keys added by 2025. Notable projects include the Marriott JVC Hotel & Residence Inn with 250 rooms, the Fairmont Dubai on Sheikh Zayed Road with 725 rooms, and the Dusit Princess Regis JVC Hotel with 224 rooms.
Logistics warehouses
The ValuStrat Price Index (VPI) for Dubai Industrial Capital Values stood at 150 points, compared to a baseline of 100 points, set in Q1 2021. Logistics warehouses recorded annual capital gains of 15%, and a quarterly growth of 4.6% on the ValuStrat Price Index.
Typical logistics warehouses were valued at AED 293 per sq ft as of Q4 2024, with the top performing locations in terms of year-on-year price increases being Dubai Investment Park (20.5%), Al Quoz (16.1%) and JAFZA North (15%). Demand is expected to outpace supply in the logistics sector, and potential interest rate cuts could boost demand, supporting continued price growth.
For a detailed perspective on the property market, visit: Dubai - Review 2024 - Outlook 2025
