During 2024, Dubai's residential property market is steadily growing and breaking records. About 170 thousand transactions are expected by the end of the year. The number of foreign investors in the total volume of buyers remains stably high.
Among the leaders in purchases are citizens of the Russian Federation, who are consistently in the top 5 among foreign investors. Russians take advantage of the fact that there are no geopolitical restrictions in the UAE market and actively buy residential property.
Results And Trends At The End Of 2024
Dubai's property market continues to show steady growth, as evidenced by the impressive performance of recent months. A surge in buying activity from both local residents and foreign investors has led to a record increase in residential property values.
According to official figures, by December, property prices in Dubai had risen by 20% year-on-year.
Even with this growth, the total number of transactions for 2024 is expected to reach 170,000. This is a 30 per cent increase in year-on-year comparison.
Compared to November 2023, the total volume of residential property transactions for the month increased by almost 11%. This month, 13,000 contracts totalling $10.8 billion were recorded, up 1.6% year-on-year.
The off-plan sector was the most active, with over 8.5 thousand sales transactions in November 2024, representing a year-on-year increase of 46%.
Buyers bought apartments more actively than villas: the ratio remains the same as in previous years - 80/20 on average.
An analysis of the preferences of buyers of residences with two or fewer bedrooms shows:
- about 40% are interested in buying one-bedroom apartments;
- 42% are focused on two-bedroom residences;
- about 18% were interested in studios.
Among those looking for villas or townhouses, 37% are buying three-bedroom lots, while 50% are buying lots with four bedrooms or more.
Popular neighbourhoods for buying residences remain:
- Palm Jumeirah;
- Business Bay;
- Downtown Dubai;
- Dubai Marina;
- Jumeirah Village Secl.
In the villa and townhouse segment, MBR City, Palm Jumeirah, Al Furjan, Dubai Hills Estate and communities in Dubailand are the most sought after.
Despite an overall increase in sales, the villa and land segments are showing a decline. In November, 1,900 villas worth $2.8 billion were sold, down 36 per cent compared to November 2023. Sales of land plots decreased by 40%, totalling 387 transactions worth $2.2 billion.
Thus, the Dubai property market continues to exhibit a high level of activity, but there is a difference in growth dynamics depending on the segment.
Market Trends
Dubai's property market is dynamic, responding to changing buyer preferences and strategic initiatives by the authorities. Against this backdrop, a number of trends have emerged.
Sustainable Development And Prioritisation Of Eco-Friendliness
Contemporary projects in Dubai are increasingly centred on sustainability principles. For example, the Dubai Green Building Regulations programme encourages the creation of energy-efficient buildings, reducing energy and water consumption.
The inclusion of eco-friendly materials, renewable energy sources (solar, geothermal) and extensive green spaces are becoming standard. The trend is fuelled by a global increase in environmental consciousness and a desire to reduce carbon footprint.
In 2024, Dubai is ranked third in the international ranking of cities with more than 400 projects with a LEED licence or green building certification.
Smart Homes And Technology Integration
Dubai is actively implementing the concept of a "smart city". The Smart Dubai strategy sets ambitious goals for the digitalization of the city, which stimulates the development of the smart home market.
New residential complexes are being equipped with automation systems that control lighting, security, and energy consumption. This increases the comfort of living and the efficiency of using resources, attracting buyers who appreciate technological innovations.
On average, the number of such projects is growing by 12% per year.
The Popularity Of Functional Common Areas And Coworking Spaces
The proliferation of remote work has led to an increased demand for flexible housing options, such as coworking spaces and spaces for collaboration and recreation.
It is convenient for freelancers, digital nomads and young professionals. Almost every third elite complex provides coworking spaces and joint work areas for residents.
The Constant Demand For Luxury
Despite new trends, Dubai remains a centre of luxury real estate. Complexes with exclusive amenities such as private beaches and spa centres continue to be in high demand among wealthy buyers.
Luxury villas and residences priced above $2.7 million, such as those at District One West 2 and The Acres Villas, are being bought up so aggressively that their share of transactions has increased by 2-4 per cent over the past few months.
Rentals
According to the Dubai Land Department, more than 560,000 residential property rental transactions were recorded by mid-December. This figure is comparable to the level of 2023, when about 540 thousand transactions were conducted.
Among tenants of apartments 65% favoured furnished options, while for villas and townhouses 52% were looking for unfurnished options, and only 48% - furnished.
The structure of concluded contracts shows that 41% are new tenants and 59% are renewals of existing tenants, which indicates some stabilisation in the market.
Geographical distribution of tenants shows a clear segmentation of demand. Among apartments, the most sought-after locations are:
- Dubai Marina;
- Business Bay;
- Downtown Dubai;
- Deira;
- Jumeirah Lake Towers.
Among villas and townhouses, tenants choose:
- Arabian Ranches 3;
- Al Barsha;
- Damac Hills;
- Dubai Hills Estate.
As an example, the average annual value of rental contracts during 2024 was:
- two-bedroom apartments - $30k;
- townhouses - over 40 thousand dollars;
- villas - 46 thousand dollars.
The Dubai Land Department noted that in the first half of 2024, the rental value of luxury apartments increased by 7% and luxury villas by 27%. We can expect the figures to grow for the whole year as well.
Forecast For 2025
Experts predict further growth in demand for renting and buying property in Dubai in 2025. The attractiveness of the Dubai housing market is supported by a number of factors, including a favourable tax system, advanced technological infrastructure and visa and residency programmes open to citizens of all countries.
Key Outlook
Dubai's property market has seen steady growth in both prices and demand. The post-pandemic boom has led to an unprecedented increase in transactions, reflected in a steady rise in rents and property values in most areas.
The year 2024 has seen a record increase in villa values, most notably in Palm Jumeirah and Jumeirah Islands, where prices have almost doubled compared to 2014.
However, price growth is expected to slow to 5-8% in 2025 in the luxury property market due to the potential risks of the global economy.
Luxury villas are expected to see the strongest price growth in 2025, with beachfront residences and penthouses expected to grow by a further 8-10%. The highest growth will be seen in expensive neighbourhoods such as Palm Jumeirah, Dubai Hills Estate, Jumeirah Golf Estate.
Further growth in the commissioning of completed projects is predicted. This is due to the commissioning of pre-sold properties in 2022-2023.
The next two years are planned to bring about 182,000 new properties into operation, which is significantly higher than the average of previous years. Between 2019 and 2023, an average of 40 thousand lots per year were commissioned.
Further increase in supply is expected until 2029 - developers plan to build 300 thousand new properties. Of which 80 per cent will be apartments and 17.5 per cent villas.
Such an increase in supply is due to demand from buyers and the competent policy of the state.
Dubai's Population Will Continue To Grow
It is planned that the emirate's population will reach 4 million by 2026. The forecast of population growth to 5.8-8.6 million by 2040 implies the need to build at least 550,000 additional housing units to meet demand.
Strategy 2033 For Dubai's Property Market Will Continue To Be Implemented
Part of the Emirate's D33 development programme to further develop the sector.
The aim is to increase the volume of property transactions to $272 billion by 2030. The sector's contribution to the economy is planned to increase to $19.8bn.
The strategy plans to increase the home ownership rate to 33%, implement real estate affordability programmes and increase market transparency through, among other things, digitalisation.
It is planned that as part of the strategy, Dubai will continue to implement policies aimed at attracting investors and encouraging property purchases.
Demand For Development Communities Will Increase
Demand will shift towards emerging communities. While established locations such as locations in the centre of the emirate and Dubai Marina will continue to attract people, new communities will come to the fore in 2025.
Clusters such as Emaar South, Valley, Dubai Creek Harbour, Damac Riverside are expected to thrive with new premium common areas, reasonable prices and proximity to important business and entertainment centres.
There Will Continue To Be Interest In Off-Plan Projects
Dubai will continue to be a magnet for foreign investment. In particular, interest in off-plan developments is expected to continue in 2025, as well as new integrated projects from 2023-2024, such as Oasis by Emaar, Palm Jebel Ali and Damac Laguns.
Rentals
Dubai continues to be one of the fastest growing rental markets in the world, driven by both domestic economic factors and global trends, according to analyst firm Knight Frank.
Rental property in Dubai is likely to generate returns of up to 10% in 2025. The bottom line depends on the location and type of property.
Some of the top communities attracting luxury property tenants in the emirate include Business Bay, Dubai Marina and Jumeirah Village Circle. By the end of 2024, there continues to be a growing interest in residential property rentals in the locations, which is also supported by an increase in the number of lease transactions. A steady 10-12% growth in contract values can be expected.
In 2025, high-end neighbourhoods such as Jumeirah Islands and Al Barari can be expected to continue to see significant rental value growth in excess of 12% due to limited supply and high demand. Similar rates are expected in newly developed locations like Dubai South, near the redeveloping Al Maktoum International Airport.
Forecasts indicate that with continued economic growth and increasing tourist numbers, the rental market in Dubai will remain stable and attractive for investment.
Conclusions
- Growth of the market continues. About 170 thousand transactions are expected at the end of the year.
- Value growth is expected to slow down. While in 2024 prices increased by 15-20% on average, in 2025 an increase of 10% is expected.
- Leases will continue to generate income at 10% per annum.
- Contract value growth is expected to grow at 10-12%.
- The market will be driven by government programmes, including D33, and policies aimed at attracting capital and population growth.
