Dubai Annual Market Update 2023/2024 (image)

Dubai Annual Market Update 2023/2024

Dubai is firmly demonstrating its position as a global economic hub and investment destination.

Office Market Trends

  • Office Supply: Only 1.65 million sq. ft. of office space is expected to be handed over in 2024, most of which is pre-leased.
  • Occupancy Levels: The office market is witnessing occupancy levels at an all-time high. City-wide office occupancy is at 89% and Grade A office occupancy is at 92%.
  • Absorption: 13 Million sq. ft. of office stock has been absorbed in the last three years.
  • Rents: City-wide office rents increased by 21% year-on-year and are 16% above 2014 peak values. Offices at One Central at 46%, Downtown Dubai at 45% and Business Bay at 36%, saw the highest annual office rental increases while ICD Brookfield Place in DIFC has the highest office rental rates in Dubai.
  • Sales Prices: The office sales market saw a 24% year-on-year surge in transaction volumes along with a 23% increase in median sales prices, albeit still below the peak values of 2014

Residential Market Trends

  • Residential Supply: With over 39,400 units, 2023 saw the highest level of supply handovers since 2020. 83% of all 2023 handovers were apartments while villas formed the remaining 17%.
  • Project Launches: In 2023, new apartment project launches saw a 78% year-on-year increase while new villa project launches saw a 31% decrease.
  • Transaction Volumes: While transaction volumes are at an all-time high, the pace of increase has moderated over 2023 compared to the sharp spikes seen in 2022. The off-plan market saw a 32% year-on-year increase while the secondary market saw a 17% increase in the number of transactions.
  • Sales Price: At over 20%, 2023 witnessed the sharpest year-on-year sales price rise while 2022 saw a relatively lower annual increase of 11%.
  • Rents: Although residential rents continue to rise, the pace is slowing down. City-wide rents in 2023 saw a 19% year-on-year increase compared to 27% in 2022.
  • Gross Yields: Residential gross yields are at a seven-year high, representing an improvement in returns for residential units due to higher increases in rental prices compared to sales prices.

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