Dubai’s real estate market continued to see capital value appreciation in 4Q 2024, with ValuStrat’s price index climbing 27.5% y-o-y to 200.7 points, according to its latest review (pdf). Off-plan transactions grew a whopping 143.8% y-o-y, while ready sales saw a record-breaking 13k transactions, up 9.2% y-o-y.

Villas and townhouses lead gains: Prices for villas and townhouses increased 31.6% y-o-y, with a 6.5% quarterly increase. Jumeirah Islands (42.5%) and Palm Jumeirah (42.3%) were the top performers. The prime segment also saw an annual capital value increase of 29.9% y-o-y, with properties with exceptional amenities and views pushing the valuation index to a record high.

Affordable segment still active: Nearly 39% of all ready home sales were priced below AED 1 mn, with apartments seeing a capital value growth of 23.6%, with the highest jumps seen in The Greens (31%) and Palm Jumeirah (28.3%)

The housing supply crunch has yet to let up: Only 58% of the anticipated residential supply was delivered in 2024, with 27k homes completed — the lowest in six years. Meanwhile, Dubai’s population surged by 170k, marking the highest growth rate since 2018. Looking ahead, 118k apartments and 28k villas and townhouses are under construction, with completion expected by 2028.

Rents kept climbing: Residential rents increased 9.8% y-o-y, with apartment rents averaging AED 92k and villa rents at AED 421k. Office rents surged 20.8% to a median AED 1.6k per sqm.

COMMERCIAL SEGMENT-

Demand for office spaces remained strong, pushing capital values up 23.9% y-o-y. The ValuStrat Price Index for offices hit a record 230.6 points, with Business Bay accounting for 46% of 4Q transactions. Office occupancy was estimated at 88% across the emirate during the quarter, according to ValuStrat.

On the hospitality side: Dubai’s hotel occupancy hit 78%, with revenue per available room rising 2.8% to AED 405 and average daily rate at AED 520. International arrivals reached 16.8 mn, up 9.2% y-o-y.

And for the industrial segment: Logistical warehouses recorded annual capital

gains of 15%, with Dubai Investment Park and Al Quoz seeing the best performance. Demand is expected to continue to outpace supply, especially with the prospect of lower interest rates this year.

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