Dubai’s residential real estate market has entered its fifth year of upward trajectory, with a 20 percent year-on-year increase in city-wide residential sales prices and an 18 percent rise in rental prices, according to Cushman & Wakefield Core’s Q3 2024 Market Update.
The rise marks the 17th and 15th consecutive quarters of price and rent increases respectively, underscoring sustained demand.
Supply for 2024 remains moderate but the pipeline is building up for upcoming years.
Dubai real estate supply
In Q3 2024, approximately 9,157 residential units were delivered, bringing the year-to-date total to 22,900 units.
An additional 10,700 units are projected for Q4, positioning the 2024 annual total at around 33,600 units. While 2024’s supply remains moderate, the development pipeline is gaining momentum, with substantial handovers anticipated over the next two to three years.
This increase in supply may contribute to market stabilisation, according to Cushman & Wakefield Core.
The off-plan market continues to dominate while the secondary market shows sustained signs of stabilisation.
Off-plan transaction volumes in Q3 2024 surged by 51 percent compared to Q3 2023, while secondary market sales saw a year-on-year increase of 19 percent.
Prathyusha Gurrapu, Head of Research and Consultancy at Cushman & Wakefield Core said: “In Q3 2024, off-plan transactions were around 34,000, a figure 2.3 times greater than that of secondary market transactions.
“This reflects a growing shift in Dubai’s residential market towards off-plan properties, primarily fuelled by the appeal of attractive payment plans and increasing demand for property-linked visas”.
There are emerging signs of price moderation, particularly in prime segments where growth is stabilising.
City-wide sales prices recorded a robust 20 percent year-on-year increase. By market segment, villa sales prices saw a strong 23 percent rise year-on-year, while apartment prices followed closely with a 19 percent increase compared to the same period last year.
While city-wide sales prices continue their upward trajectory, prime districts are experiencing a relative stabilisation in price growth and indicating signs of moderation in the upper end of the market.
In contrast, mid-market communities are witnessing a sharp double-digit growth across both villa and apartment communities.
At the same time, city-wide rents continue to rise, impacting affordability and pushing tenants to renew where possible.
City-wide rents have increased by 18 percent year-on-year, with apartment rents leading at a notable 19 percent rise, while villa rents saw a more moderate increase of 13 percent, indicating a trend towards stabilisation in the villa segment as prices approach affordability thresholds.
The rental market reflects similar dynamics observed in the sales market, where prime rental growth has moderated in areas like Palm Jumeirah and Dubai Marina, both experiencing single-digit increases.
In contrast, districts such as Discovery Gardens, Dubai Sports City, Dubailand, and Jumeirah Village Circle recorded the highest rental growth, highlighting shifting demand towards more affordable and mid-market communities.
Furthermore, a notable trend is the continued increase in tenant renewals, which rose by 16 percent in Q3 2024. The new RERA rental calculator has helped narrow the gap between new and renewed rental rates, however, new leases are still trading at an average premium of 14 percent over renewals.
In the ultra-prime market, 424 residential properties were sold for more than AED20m ($5.45m) in Dubai in Q3 2024, displaying a strong 41 percent increase over Q3 2023.
Palm Jumeirah remains the location of choice accounting for the highest share of ultra-prime transactions.
Prathyusha said: “With growing UHNI demand for ultra-prime properties, particularly waterfront properties and branded residences, we foresee this segment to remain strong as global wealth continues to gravitate to Dubai.”