The Dubai real estate market is increasingly oriented toward affordability, with two in five property sales in the ready-home sector priced below AED 1 million (approximately $272,000). This shift highlights a growing demand for mid-market and budget-friendly apartments, as reported by a recent real estate market report.
This comprehensive review of Dubai’s residential, commercial, and hospitality real estate sectors. The analysis reveals a robust expansion and heightened activity across various market segments, driven largely by favorable economic conditions.
According to Report, Dubai’s real estate sector showed exceptional growth in Q3 2024. The city’s population surge and a reduction in interest rates have contributed to this upturn, setting records for home sales and mortgage applications. Office and warehouse prices also hit unprecedented highs, reflecting the market’s broader upward momentum.
Changing Property Profiles and Sales Metrics
The average size of sold homes has declined to an all-time low, and this has been accompanied by a reduction in the average sales price per square foot for the first time this year. According to the Report’s Price Index (VPI), residential property values have climbed 28.9% over the past year, with freehold villa communities reaching decade-high price levels. A notable 98% of villas have seen their values double since 2020.
The prices of ready villas and townhouses have risen by 33.1% year-over-year, while apartment values posted a quarterly increase of 24.8%, up from 23.4% in the previous quarter. Apartment rental rates surged 15.4% over the last year, surpassing the 4.9% increase in villa rents.
Rising Demand for Commercial Real Estate and Logistical Spaces
Dubai’s demand for office spaces remains robust, with capital values experiencing a more modest quarterly increase of 2.6%. Annually, office capital values have risen 25.8%, with sales up 3.8% and rental rates averaging a 20.8% increase. Logistical warehouses also saw significant growth, with an annual rise of 14.6% and a quarterly increase of 5.2%.
Boosted Hospitality Sector and High Hotel Occupancy Rates
The hospitality sector in Dubai continues to thrive, with the number of hotel keys now surpassing those in major global cities such as London, Paris, and New York. Dubai is on track to exceed the hotel inventory in Tokyo and Las Vegas, driven by rising tourism and consistently high occupancy rates throughout the year. This expansion reflects the favorable conditions attracting new businesses and supporting continuous market growth.
