The latest Dubai 3rd quarter real estate review report from ValuStrat, a globally recognised consultancy specialising in multi-sector advisory services, has revealed insightful dynamics in Dubai’s real estate market. The report comprehensively analyses the residential, commercial, and hospitality sectors and underscores a market showing robust growth and market activity.
Haider Tuaima, Director and Head of Real Estate Research, shares his synopsis of Dubai’s real estate market.
According to him, Dubai’s property market experienced extraordinary progress in Q3 2024, with record population growth and falling interest rates driving the upswing. Home sales and mortgage applications reached all-time highs, while office and warehouse prices also hit record levels. The market continued to shift towards mid-market and affordable apartments; in fact, 2 out 5 ready home sales were worth less than AED 1 million. The average size of sold homes shrunk to its lowest level, and average sales prices per square foot softened for the first time this year.
The ValuStrat Price Index (VPI) showed a 28.9% annual increase in residential values. Freehold villa communities surpassed 10-year price peaks, with 98% of villas doubling in value since 2020. Ready villa and townhouse prices saw a 33.1% annual rise, while apartment values grew by 24.8% this quarter, up from 23.4% in the previous quarter. Apartment rentals increased by 15.4% over the past year, significantly outpacing the 4.9% rise in villa rents.
Demand for office space in Dubai remains robust, though capital values experienced a more moderate quarterly growth of 2.6%, resulting in a 25.8% annual increase, sales up 3.8%, and rents increasing by 20.8% on average.
Logistical warehouses experienced a 14.6% annual increase and a 5.2% rise quarterly. Demand has strengthened and is fueled by favourable market conditions, business expansions, and new companies entering the region. The total number of hotel keys in Dubai has surpassed that of major cities like London, Paris, and New York, and it is on track to surpass Tokyo and Las Vegas. The rapid growth in tourist numbers has maintained high occupancy levels year-round.
He concludes that overall, Dubai’s property market set new records in Q3 2024, with villas outperforming apartments and significant growth across the office, hospitality and warehouse sectors.
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ValuStrat is an international consulting group providing Advisory, Valuations, Research, Transaction Advisory, Due Diligence and Industrial Consulting services, working across various industry sectors. With 45+ years of experience, a network of 14 offices in 5 countries and a client base of 1,000 corporations across the Middle East, UK, Europe and Africa, ValuStrat assists diverse clients, from governments, multinationals, large local corporations and financial institutions to startups, SMEs and family businesses. For Valuation services, it is the preferred service provider to over 120 financial institutions across the EMEA region.
For a detailed perspective on the property market, visit: Dubai - Real Estate Review Q3 2024
