Dubai’s mid-market segment leads price growth as the emirate marks fifth year of real estate boom

Dubai’s housing market marked its fifth consecutive year of price growth, with sales prices rising 20% y-o-y in 3Q 2024 and rents increasing 18% y-o-y, according to Cushman & Wakefield’s latest report. Apartment rents climbed 19% y-o-y, while villa rents rose 13%, “indicating a trend towards stabilization in the villa segment as prices approach affordability thresholds,” the report said.

Mid-market leads growth: Mid-tier communities recorded the strongest price gains, with double-digit increases for both villas and apartments. Meanwhile, the upper end of the market is showing signs of moderation, with price growth stabilizing, Cushman & Wakefield said.

Sales volumes continued to grow, with off-plan transactions increasing 51% y-o-y in 3Q, compared to a 19% rise in secondary market sales, as flexible payment plans and property-linked visas fueled demand.

Ultra-prime sales rose 41% y-o-y, with 424 properties sold for over AED 20 mn, and Palm Jumeirah remaining the most popular location for that segment.

Supply also picked up: Developers delivered 9.2k units in 3Q, and another 10.7k are expected by year-end, bringing 2024’s total to 33.6k.

Prices to stabilize in the coming years? An increase in supply over the next 2-3 years is expected to contribute to market stabilization, the report said.

THE OFFICE MARKET-

Office rents in Dubai increased by 19% y-o-y in 3Q, with average office rents reaching AED 165 per sqft, according to the report. DIFC led the market with rents at AED 425 per sqft.

Price growth came on the back of heightened activity, with city-wide occupancy standing at 91% and Grade A office spaces at 94% occupancy. Central business districts — including Downtown Dubai, Sheikh Zayed Road, and DIFC — reported occupancy rates of 95% or higher.

Limited supply is also to thank: Dubai’s office market remains undersupplied, with only 1.5 mn sq ft of office space expected to be delivered by 2025 and most new office projects slated for 2027/2028, the report adds. “As the supply shortage is expected to persist in the near term, we expect a sustained upward pressure on rents, record high occupancy levels, and strong pre-leasing activity across the upcoming office stock.”