A report claims that both the residential and commercial segments of the Dubai real estate market saw strong performance in the third quarter of 2024.
With combined residential and commercial sales for the quarter totaling AED138.8 billion ($37.79 billion), Dubai’s real estate market continues to attract interest from around the globe, according to a report by Engel & Völkers Middle East, which is well-known for offering premium residential and commercial real estate services.
While residential transactions increased 40.8% year over year, contributing AED115.6 billion, the commercial market added AED23.2 billion in sales, representing a 28% increase in the total transaction value.
The main factors driving Dubai’s booming real estate market are the emirate’s appeal as a destination for wealthy individuals and businesses, strong economic fundamentals, and increased foreign investment. With the help of key sectors like real estate, tourism, and international trade, the UAE’s economy is predicted to expand by 3.9% in 2024 and 6.2% in 2025.
“Dubai’s real estate market continues to demonstrate its resilience and appeal to a global audience, as both residential and commercial sectors are experiencing significant growth. The city’s strategic vision, business-friendly environment, and world-class infrastructure continue to attract investors from around the world,” said Daniel Hadi, CEO of Engel & Völkers Middle East.
“With demand for premium properties at an all-time high, and the government’s economic diversification initiatives bolstering growth in key sectors, we anticipate continued upward momentum across all real estate segments.”
The primary demand is not on schedule
The Q3 results for Dubai’s residential sector were impressive, with total transaction volumes increasing 40.8% year over year to AED115.6 billion. Off-plan properties accounted for over 65% of all transactions due to new projects and heightened investor interest. In Q3 alone, more than 30,000 off-plan units were sold, a 62.5% increase over the same time last year. Communities like Jumeirah Village Circle, Dubai Hills Estate, and Business Bay set the standard, but new construction in areas like Dubai Creek Harbour and Sobha Hartland II also attracted a lot of interest.
The secondary market saw a 12.8% increase in transaction volumes, demonstrating the continued demand for ready-to-move-in properties. While apartment sales in important communities like Jumeirah Village Circle, Dubai Marina, and Business Bay were robust, villa and townhouse sales in Emirates Living, Al Furjan, and Mohammed Bin Rashid City skyrocketed despite price increases of over 15% in many areas.
Luxury market: Record-breaking year is on the horizon
Despite a 6% decline in transactions over AED 10 million from Q3 2023, Dubai’s luxury real estate market is still on track for a record-breaking year. In Dubai, 110 transactions totaling more than AED 10 million—three of which exceeded AED 200 million—took place in the renowned upscale neighborhood of The Palm Jumeirah. Among these was the sale of a penthouse for AED 275 million, indicating the continued demand for ultra-luxury real estate.
While newer neighborhoods like The Oasis and Palm Jebel Ali showed the growing appeal of Dubai’s luxury market by attracting wealthy individuals searching for upscale real estate in the city, demand remained high in other well-known luxury communities like Mohammed Bin Rashid City and Dubai Hills Estate.
High levels of demand in the business sector
With AED 23.2 billion in sales and a 28% year-over-year increase in transaction value, the commercial real estate market experienced impressive growth in Q3. The 12.6% increase in office sales and the 16.8% increase in retail transactions indicate strong demand for upscale commercial real estate. The study found that the most sought-after office space locations were still Business Bay and Jumeirah Lakes Towers (JLT), underscoring Dubai’s appeal as a significant global business center.
Despite a modest 6.5% drop in total commercial sales volumes, transaction values have increased as a result of rising prices for high-quality assets. Office and retail rents increased by 4% and warehouse rents by 19%, respectively, reflecting strong demand in the industrial sector and the leasing market.
The leasing market continues to see high demand.
Dubai’s leasing market is still booming, partly because of the city’s growing population. Communities like Dubai Marina, Jumeirah Village Circle, and Dubai Silicon Oasis are where most rental transactions take place. Even though more and more tenants are opting to buy or extend their leases, rental prices are still rising due to ongoing demand; average rents have increased by double digits in many areas.
A promising future
Given that the UAE economy is predicted to expand by 3.9% in 2024 and 6.2% in 2025, Dubai’s real estate market is well-positioned for future expansion. The government’s efforts to diversify the economy, particularly in key sectors like technology, healthcare, and green energy, should boost demand in both the residential and commercial markets, the report claims.
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