The Dubai real estate market saw notable growth in the fourth quarter of 2024, driven by limited supply and increasing demand. Preliminary estimates from ValuStrat indicate that 58 percent of the projected residential supply was delivered, equating to about 27,000 completed homes—marking the lowest number in six years. Meanwhile, population growth exceeded expectations, adding over 170,000 new residents, the highest increase since 2018. This disparity between supply and demand has led to significant increases in property prices and rental rates.
According to the ValuStrat Price Index, annual capital value increases were observed across key sectors: apartments grew by 23.6 percent, villas by 31.6 percent, offices by 23.9 percent, and warehouses by 15 percent. Annual rents also rose, with villas increasing by 5.8 percent, apartments by 13 percent, and offices by 22.5 percent.
However, challenges persisted, particularly in residential and office transactions, mainly due to a drop in off-plan sales. Despite this, ready sales reached an all-time high, with the highest number of transactions recorded in a single quarter.
Read more: Dubai’s residential market sees 11.4 percent annual growth: ValuStrat
Key market indicators
The hospitality sector thrived with 155,000 hotel rooms, achieving a remarkable 78 percent occupancy and a 2.8 percent rise in revenue per available room (RevPAR). This performance underscores Dubai’s enduring appeal and resilience in the real estate market.
Residential market insights
The ValuStrat Price Index for residential capital values rose by 5.6 percent quarterly and 27.5 percent annually, reaching 200.7 points. Most apartment communities are valued, on average, 11.4 percent lower than a decade ago, with exceptions like Palm Jumeirah and The Greens. In contrast, villa values are, on average, 50.4 percent higher than their 10-year peaks.
In Q4 2024, villa capital gains slowed, with the index reaching 259 points, marking a 31.6 percent year-on-year increase. Top annual performers included villas in prime locations such as Jumeirah Islands and Palm Jumeirah. Apartments saw a slower annual growth rate of 23.6 percent, with the highest yearly capital gains in The Greens and Palm Jumeirah.
Office market performance
The demand for office space remained robust, with capital values increasing by 5.8 percent quarterly and 23.9 percent annually. The index for office capital values reached a record high of 230.6 points, more than doubling the baseline set in Q1 2021. The average valuation for office space was AED18,944 per square meter. Notably, the Dubai International Financial Centre (DIFC) recorded the highest annual capital gains at 38.8 percent.
Retail and hospitality sectors
In retail, new developments like Al Khail Avenue are nearing completion, adding significant square footage to the market. E-commerce in the UAE is projected to exceed AED48.5 billion by 2028, reflecting growing consumer trends.
The hospitality market also flourished, with total international guests reaching 16.79 million in the first eleven months of 2024, a 9.2 percent annual growth. Hotel occupancy remained at 78 percent, with an ADR of AED520.
