Dubai’s real estate sector marked another record-breaking year, setting new milestones with an unprecedented total of 180,900 transactions valued at $142.1 billion. The city’s property market is witnessing a sustained rise in prices across popular neighborhoods, driven by robust demand and a steady supply of new inventory.
A combination of favorable government policies, a thriving economy and increasing global interest from high-net-worth individuals is driving Dubai’s real estate growth. In addition, its focus on sustainable and technologically advanced developments has further enhanced its appeal.
All of these factors make Dubai’s real estate market one of the best globally to invest in with the city offering some of the highest returns on investment in the world.
Dubai’s ROI trends in 2024
In its latest report on Dubai’s real estate market, Bayut unveiled some of the key trends shaping the sector in 2024. Last year, affordable apartments in areas such as Dubai Investments Park (DIP), Discovery Gardens and Liwan offered the highest yields of 9 percent to 11 percent.
Mid-tier communities including Living Legends, Motor City and Al Furjan have recorded ROI percentages above 8.7 percent. Meanwhile, luxury apartments in Al Sufouh, Green Community and Al Barari have reported rental yields between 7 percent and 9 percent.
For villas, Dubai Industrial City, International City and DAMAC Hills 2 have led the affordable segment with ROIs above 6 percent. Mid-tier villa communities, including Jumeirah Village Circle, Al Furjan and Jumeirah Village Triangle, offered returns of 6 to 8 percent. Meanwhile, luxury villa communities including The Sustainable City, Al Barari and Tilal Al Ghaf recorded ROIs exceeding 6 percent.
Investor preferences in property buying
Bayut’s data also revealed significant price increases for both apartments and villas in popular Dubai neighborhoods, particularly for villas in Arabian Ranches, which saw rises of up to 56 percent.
Buyers and investors interested in affordable property options showed increased interest in areas such as Dubai Silicon Oasis, Dubai Sports City, DAMAC Hills 2 and Dubailand in 2024.
For investors seeking mid-range properties in Dubai, neighborhoods such as Jumeirah Village Circle, Business Bay, Al Furjan and The Springs gained popularity. Meanwhile, luxury investors have shown a preference for Dubai Marina, Downtown Dubai, Dubai Hills Estate and DAMAC Hills.
The luxury property segment, affordable housing and high-demand off-plan projects present lucrative investment opportunities, delivering robust rental yields and significant potential for long-term capital appreciation. This dynamic environment positions Dubai as a prime destination for diversified real estate investments.
With over 4 million expats expected to be residing in Dubai by 2025, the surging demand for housing is likely to persist. This presents exciting opportunities for investors in the industry.
Property prices surge
Dubai’s real estate sector saw a notable surge in prices last year. Transactional prices for affordable apartments in the most-searched-for areas have increased up to 26 percent, while villa prices showed upticks of over 100 percent with Dubailand recording the most significant spike due to an increased demand for budget-friendly homes and residential plots.
In the mid-range segment, transactional prices for both apartments and villas have risen by between 7 percent and 40 percent. The highest price movements were recorded in Jumeirah Lake Towers, where inventory is being priced at a premium to tackle the increased demand for centrally-located apartments.
The luxury property market has also seen consistent increases, with prices climbing by 7 to 31 percent, with the steepest hikes recorded in Dubai Hills Estate.
Read: UAE real estate market booms with over $243 billion in transactions in 2024
Rental market trends
Bayut’s data has also indicated significant rental price hikes across all segments. As a result on increasing demand, the rents for affordable apartments have risen by up to 48 percent, with the largest increase reported for 2-bedroom flats in Deira.
Mid-tier apartment rentals have increased by up to 41 percent, highlighting the increasing demand for centrally-located properties, particularly in JLT. Meanwhile, luxury apartment rents across Dubai’s real estate market have seen growth between 5 and 25 percent.
Villa rental prices have also experienced growth, with affordable villa rentals increasing by up to 44 percent. The mid-tier villa rental market has also recorded upticks of up to 45 percent, particularly for 4-bedroom units in Town Square, with more people desiring suburban properties in self-sustaining communities.
With the demand for luxury properties at an all-time high, upscale villa rentals have surged by up to 60 percent, with Jumeirah registering the highest increase for its larger 6-bedroom units.
Some of the most popular areas for affordable rentals in 2024 included Deira and Bur Dubai for apartments and DAMAC Hills 2 and Mirdif for villas. In the mid-tier market, Jumeirah Village Circle (JVC) and Business Bay have dominated apartment rentals, while JVC and Town Square were preferred for villas.
Dubai Marina and Downtown Dubai have also continued to be sought-after for luxury apartments, while Dubai Hills Estate and Al Barsha have topped the villa rental market.
Transactional rental prices in affordable areas rose by between 5 and 19 percent last year, while mid-tier and luxury segments have recorded upticks of up to 16 percent.
