The Dubai residential market continues to show strong growth, with property values rising by 21.3% over the past year, now standing at AED 1,573 per sq ft, according to the Q2 Dubai Residential Market Review report from global property consultant Knight Frank. This places the average prices 6.4% above the 2014 peak.
Villa sale prices have grown by 24.3% over the last 12 months, reaching AED 1,896 per sq ft, putting them 28% above the 2014 peak.
This growth illustrates the enduring appeal of stand-alone, beachfront homes and branded residences that offer almost instant access to the Dubai lifestyle.
Knight Frank’s 2024 Destination Dubai showed that access to greenery, wellness centres, and waterfront locations are the top factors attracting international buyers and investors.
The Palm Jumeirah, Jumeirah Bay Island, Jumeirah Islands, and Emirates Hills, collectively known as ‘Prime Dubai’, saw a 7% increase in average transacted prices, which stood at AED 3,706 per sq ft at the end of H1 2024.
Palm Jumeirah accounted for the majority of prime deals in H1 2024, at 89.3%. It was followed by Jumeirah Islands (5.03%), Jumeirah Bay Island (3.56%) and Emirates Hills (1.05%).
“The trajectory of home values in Dubai remains unchanged, highlighting the enduring demand from domestic and international buyers for homes in the city. The change in the nature of buyers however, from being purely investment driven, to those looking to purchase for personal reasons is eroding the number of listings in the city, which is also contributing to the sustained price rises which have continued for 21 quarters.
“Indeed, the number of residential listings in Q2 2024 fell by 22.8% compared to the previous year, and for the first time since Q1 2022, the number of unique home listings in a single quarter has fallen below 100,000”.
Faisal Durrani, Partner – Head of Research MENA, Knight Frank
The decrease in luxury home supply was even more pronounced. The number of homes available for sale in Dubai’s four prime residential communities – Palm Jumeirah, Emirates Hills, Jumeirah Bay Island and Jumeirah Islands – has fallen by 47% over the last year to 2,851 properties.
“The fall in the number of homes available for sale in the city reflects the increasing ‘buy-to-stay’ and ‘buy-to-hold’ mentality among purchasers. Buyers are increasingly purchasing these properties to use as their primary home, or for use as a holiday home or second home. This significant shift in the mentality of buyers reflects the growing maturity of the market, which will further broaden its appeal to even more buyers and investors”.
Petri Mannila, Partner – Head of Prime Residential UAE, Knight Frank
However, the total number of homes planned or under construction now stands at 308,099 units by 2029. Of these, 82% will be apartments, with the remainder being villas.
This means an average of approximately 51,350 homes per year will be built for the next six years.
But this figure still falls short of the 73,000 homes per year that is needed over the next 16 years to accommodate Dubai’s vision of a population of 7.8 million by 2040.
This new research comes as there is a positive outlook for Dubai’s real estate sector for the 2024/2025 business season. Analysts at Elite Merit Real Estate also project sustained growth in the overall UAE real estate market.
