Dubai’s residential market continued to experience strong growth in the second quarter of 2024, with property values rising by 21.3% over the past year, driven by tightening supply and a growing “buy-to-stay” trend, according to a global property consultant.
Over the last 12 months, average residential prices increased by 21.3%, with villa prices outperforming apartments. Villa sale prices surged by 24.3%, reaching AED 1,896 per square foot, placing them 28% above their 2014 peak. Knight Frank’s Q2 Dubai Residential Market Review highlights the ongoing demand for stand-alone, beachfront homes and branded residences, which offer quick access to Dubai’s desirable lifestyle. The 2024 Destination Dubai report also identified access to greenery, wellness centers, and waterfront locations as top factors attracting international buyers.
Dubai’s luxury residential sector saw significant growth as well, with prime areas like Palm Jumeirah, Jumeirah Bay Island, Jumeirah Islands, and Emirates Hills witnessing a 7% rise in average transaction prices, reaching AED 3,706 per square foot by the end of H1 2024. Palm Jumeirah led the prime property market, accounting for 89.3% of deals in H1 2024, followed by Jumeirah Islands (5.03%), Jumeirah Bay Island (3.56%), and Emirates Hills (1.05%).
Faisal Durrani, partner and head of Research, MENA, noted that home values in Dubai continue to climb, driven by strong demand from both domestic and international buyers. This demand is increasingly motivated by personal reasons rather than purely investment-driven, contributing to the sustained rise in property prices over the past 21 quarters.
Residential listings in Q2 2024 dropped 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 fell below 100,000. The decrease in luxury home supply was particularly noticeable, with listings in prime areas such as Palm Jumeirah, Emirates Hills, Jumeirah Bay Island, and Jumeirah Islands dropping by 47% over the past year to 2,851 properties.
This decline in listings reflects the growing “buy-to-stay” and “buy-to-hold” mindset among purchasers, who are increasingly acquiring properties for personal use or as holiday homes, signaling a maturing market.
Knight Frank revised its estimate for the total pipeline of residential units set for completion by 2029, now standing at 308,099 units. Of these, 82% will be apartments, with the remaining 18% being villas. This translates to an average of approximately 51,350 homes per year over the next six years, exceeding the long-term completion rate of 30,000 homes annually. However, it still falls short of the 73,000 homes per year Knight Frank estimates will be necessary to accommodate Dubai’s projected population of 7.8 million by 2040, particularly when accounting for typical delays of 30-40% in construction completions.
