Dubai’s real estate market had a standout year in 2024, with residential sales surging to AED 232bn ($63.2bn) in the second half alone. This marked a significant 31% year-over-year increase, driven largely by the booming off-plan sector. According to a report from Espace Real Estate, 2024’s record-breaking performance saw the off-plan market account for a whopping 65% of all real estate transactions in Dubai.
Key Market Highlights for H2 2024:
Off-Plan Market Growth: Off-plan sales saw a dramatic 74% increase year-over-year, totaling 61,435 transactions worth AED 127bn ($34.6bn). This increase was fueled by Dubai’s growing population and the attractiveness of new developments.
Price Increases: Prices surged in both villas and apartments. Many established villa communities like Jumeirah Golf Estates (+35%), Dubai Hills (+27%), and Arabian Ranches (+27%) saw notable price increases. Similarly, newer communities like Al Furjan saw a rise in demand, attracting buyers looking for more affordable options compared to pricier neighboring areas.
Vibrant Secondary Market: While the off-plan sector outpaced secondary market activity in both value and volume, the resale market still saw healthy growth, with a 15% increase in transactions year-over-year.
Rising Demand and the Changing Demographic
The sustained demand in Dubai’s real estate market is being driven by a significant influx of global investors and residents. Dubai’s population has grown substantially in the past decade, which continues to fuel high demand, particularly in communities with new residential projects. The report highlights that six of the top ten buyer nationalities are from Western European countries, underscoring Dubai’s appeal to global wealth, especially in the wake of the pandemic.
Notably, Jumeirah Village Circle (JVC) has seen a 28% increase in transaction volume, supported by 24 new projects completed in 2024 alone. As these newer projects cater to a growing demand, Dubai’s expanding residential areas are becoming a magnet for international buyers seeking the city’s exceptional lifestyle and strong capital returns.
The Outlook for 2025: Will Prices Continue to Rise?
Looking ahead to 2025, the Dubai real estate market is expected to continue its growth trajectory, but at a potentially slower pace. According to John Lyons, Managing Director of Espace Real Estate, while the market is likely to see continued price increases, particularly in the off-plan sector, the explosive growth rates experienced in 2024 may not be repeated.
Rental Market: The rental sector is projected to experience an 18% increase in 2025, spurred by the demand for both long-term rentals and newly completed homes.
Limited Supply of Villas and Townhouses: The supply of villas and townhouses remains tight, with only 5% of new projects in the pipeline consisting of villas and 15% of townhouses. This limited supply, combined with high demand, will likely keep prices for these property types elevated.
Population Growth and Developer Activity: The report anticipates that Dubai’s population will continue to grow, driving further demand for residential properties. Approximately 80% of the new developments expected to come onto the market in the near future will be apartments, contributing to the city’s increasing reliance on new launches to meet demand.