Dubai’s real estate sector witnessed a remarkable expansion in 2024, with residential property values rising by 19.1 percent over the past year to AED1,685 per square foot, according to the latest report from global property consultant Knight Frank. This places average prices at 13.3 percent above the 2014 peak.
Villa sale prices have grown by 20.2 percent over the last 12 months, reaching AED2,009 per square foot, placing them 38.1 percent above the 2014 peak. This growth demonstrates the strong appeal of stand-alone villas, beachfront homes and branded residences across Dubai.
“Residential property values remain on an upward trajectory, with demand showing no signs of abating, both from domestic and international buyers,” stated Faisal Durrani, partner – head of research, MENA.
Residential pipeline stands at 302,880 units
The report also revealed that the total number of homes under construction and scheduled for completion by 2029 now stands at 302,880 units across Dubai’s real estate sector. Of these, 80 percent will be apartments, with the remainder being villas at 18 percent and branded residences at 2 percent. This translates into an average of approximately 60,576 homes per year for the next five years, higher than the long-term completion rate of around 36,000 homes per year.
Despite the robust supply, the number of homes available for sale in the $10 million+ bracket fell 40 percent, down from 4,119 to only 2,491 homes over the last 12 months. Meanwhile, the number of homes available in the $25 million+ bracket saw more than double the rate of decrease, down from 583 to only 86 properties over the last year.
“In this cycle, we have noted a rise in genuine end users, rather than speculative purchasers that have defined previous cycles This change is reflected in the fact that there has been a 30 percent reduction in homes available for sale across the city last year, with the prime markets in the city experiencing an even more acute 52 percent reduction in home listings. It’s villas though where the attention of the global super-rich remains focused, with values rising by 20.2 percent last year, reflecting a 99.8 percent uplift on Q1 2020 price levels,” added Durrani.
Prime residential market prices surge 16.9 percent
Dubai’s prime residential real estate market, which Knight Frank defines as the Palm Jumeirah, Jumeirah Bay Island, Jumeirah Islands and Emirates Hills, has also experienced a surge in performance. During Q4 2024, average transacted prices in Dubai’s most affluent neighborhoods reached AED6,627 per square foot, marking a 16.9 percent increase compared to Q4 2023.
“Dubai’s luxury market has cemented its status as a safe haven for international and local luxury buyers with another record-breaking year for the US$ 10 million homes market registering 435 deals over 2024, 153 of which were recorded in Q4 alone making it the highest figure recorded in one quarter on record for this segment,” stated Petri Mannila, partner – prime residential, Dubai.
Office rents climb 9.1 percent in H2 2024
Another segment driving Dubai’s real estate sector growth is the office segment. In H2 2024, average office lease rates across Dubai’s key submarkets showed strong growth, rising by an average of 9.1 percent, with the highest rental growth being registered in the Trade Center District at 96 percent.
“Dubai’s office market continues to experience rising levels of demand in the form of new business entrance as well as expanding businesses. This rising demand means that prime office space is in exceptionally short supply city-wide,” added Durrani.
During 2024, Knight Frank recorded 1.28 million square feet of new office space demand, a 64 percent increase on 2023. The top sectors contributing to the demand are business services, real estate, and the banking & finance sectors, which collectively contributed to 843,111 square feet of new demand in 2024.
Knight Frank projects that Dubai’s prime office supply will reach approximately 8.2 million between 2025 and 2028. This is up 86 percent when compared to the 4.4 million square feet delivered between 2021 and 2024.
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Strong demand drives growth in alternative office locations
Occupancy rates in the DIFC, Downtown Dubai, and Business Bay are currently between 95 and 99 percent, driven by robust tenant demand and limited new space. As a result, rents have surged significantly – rising by an average of 46 percent in Business Bay alone.
With prime office space in Dubai’s key business districts nearing full capacity, companies are exploring alternative locations for expansion. Areas such as Dubai Science Park and Expo City are attracting heightened interest, thanks to their state-of-the-art facilities and attractive rents.
“Occupiers remain driven by quality and we are seeing businesses migrate outside of central Dubai to newer locations where office space is available. With prime space in Dubai’s key business districts nearing full capacity, companies are finding new areas to expand into. Locations like Dubai Science Park and Expo City are experiencing increased interest, with occupiers drawn by state-of-the-art facilities and attractive rents,” noted Adam Wynne, partner – head of commercial agency, Dubai.
