Dubai’s real estate market saw a phenomenal growth in 2024 with sales value reaching AED 522.5 billion ($142.2 billion) a 27% increase from last year. According to fäm Properties latest report there were 181,000 transactions in the market a 36% increase from last year.
This achievement has solidified Dubai’s position as a global leader in real estate offering some of the best returns on investment in the world. According to DXB Interact investors made AED 100.5 billion ($27.36 billion) from the sector highlighting Dubai as the hub for real estate investment driven by strong demand, world class developments and government backed incentives.
Factors driving investors to Dubai
Dubai’s real estate market attracts investors for several reasons, such as:
Strong economic growth
Dubai’s economy is growing at an incredible rate. In Q2 2024, the economy grew 3.3% to AED 31.6 billion. The Q2 growth in H1 2024 took the entire GDP to AED 231 billion, 3.2% growth from H1 2023, with steady progress across most sectors.
The real estate sector grew 2.6% in Q2 2024, contributed 6.9% to overall growth and accounted for 8.7% of Dubai’s GDP which was AED 10.15 billion.
High returns on investment
Bayut claims that last year’s highest yields, ranging from 9 to 11 percent, were found in affordable flats in Liwan, Discovery Gardens, and Dubai Investments Park (DIP), among other districts.
It has been stated that mid-tier communities like Living Legends, Motor City, and Al Furjan have ROI percentages higher than 8.7 percent. Meanwhile, it has been stated that the rental yields for high-end apartments in Al Sufouh, Green Community, and Al Barari range from 7% to 9%.
The market for low-cost villas has been dominated by Dubai Industrial City, International City, and DAMAC Hills 2, with ROIs surpassing 6%. Returns of 6 to 8 percent were offered by mid-tier villa complexes like Jumeirah Village Circle, Al Furjan, and Jumeirah Village Triangle. At the same time, luxury villa communities like Tilal Al Ghaf, Al Barari, and The Sustainable City were noted to have ROIs higher than 6%.
Population growth
Population growth was positive due to economic activity and migration, peaked at 4.66% in 2024. Over 5 years, Dubai added around 470,000 people, Dubai is still a top destination for relocation.
Given that Dubai’s population is expected to reach 7.8 million by 2040, the real estate industry is well-positioned to profit from further expansion. By 2025, Dubai’s population is expected to surpass 4 million, which would likely result in a notable surge in demand across all real estate sectors.
Tourism surge
Tourism has been one of the drivers of Dubai’s economic growth. Between Jan to Nov 2024, 16.79 million people visited the city, 9.2% up from last year. This big jump shows Dubai is a global hub for innovation, business and leisure.
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Dubai primary market sales grow 51 percent
In 2024, developers’ sales in the primary market grew 30% year on year to AED 334.1 billion, shows high demand for new launches and off plan properties. Developer activity and investor confidence was up 51% to 119,800 in 2024. And average price per square foot shot up to AED 1,600, 10% up.
As the market attracted foreign investors with the aid of visa liberalization and residency incentives, demand was driven by the launch of new projects and favorable payment arrangements.
With 12,878 initial developer sales, Al Barsha South 4 was the best-performing site in the primary market in terms of overall volume, demonstrating its appeal to both investors and end users.
Secondary market sales grow 21 percent
Demand for secondary real estate in Dubai was strong last year, as evidenced by a 21% increase in resales to AED188.1 billion. Furthermore, there was steady activity as seen by the 14% increase in transaction volume to 61,100. Furthermore, the average price per square foot increased to AED 1,300, a 12% annual increase.
“The 2024 re-sale figures reflected buyers shifting to ready properties for immediate occupancy, and high rental yields attracting investors, while infrastructure improvements enhanced property desirability. Sales values broke historical records, and with strong rental demand, and luxury resilience, the market continues to attract global investors, reinforcing its status as a top real estate destination,” said Firas Al Msaddi, CEO of fäm Properties.
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Business Bay maintained its dominance in resale transactions, registering 5,142 agreements throughout the year, while Dubai Marina topped in overall value, with 4,924 transactions worth AED15.2 billion, underscoring its status as a posh waterfront destination.
Other popular areas in the resale market were Jabal Ali First, Downtown Dubai, Al Merkadh, Al Barsha South Fourth, and Al Thanyah Fifth.
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