Dubai Real Estate Market: Key Transactions and Insights for Q1 2024

Dubai’s real estate market has long been a pivotal indicator of economic health, demonstrating resilience and appealing to foreign investors with its lucrative gateways and dynamic growth.

Certainly! The Dubai market growth has remained steady and at a high point. The noteworthy growth in the first quarter of 2024 in Dubai reflects the evolution of trends within the sector.

Beyond resilience, the real estate market of Dubai is near to bringing mega-projects onto the surface alongside the new regulations aimed at improving transparency, hence catalyzing robust activity.

Let’s get a comprehensive overview of Dubai’s real estate market overview in Q1 of 2024 while underscoring the data that stimulated the period of development. The role of both international forces and the local market is pivotal in grounding the significant growth of Dubai’s property landscape.

Dubai Market Transaction Q1 2024

1. Transaction Volume and Value

The first quarter of 2024 observed substantial growth in both the value and transaction volume in the real estate sector of Dubai. According to the reports released by the Dubai Land Department (DLD), approximately 37,154 property transactions were recorded in Q1 of 2024.

This marks a notable rise from Q1 2023, where 31,027 deals were recorded. This boost is attributed to a stable macroeconomic atmosphere, favorable economic policies, and heightened investor confidence in the city’s property sector.

Considering the total sales value in Q1 2024, the transactions notably resulted in AED 109.85 billion, making it the second-highest value quarter in history. Conversely, the transaction value in Q1 2023 resulted in AED 89.09 billion.

2. Breakdown by Property Types

Residential properties dominated the market, accounting for over 70% of the overall deals, followed by land and commercial transactions. The surge in demand for villas and apartments is quite noticeable, specifically in prominent locations such as Jebel Ali, Business Bay, Dubai Marina, Palm Jumeirah, and Downtown Dubai.

Moreover, the market recorded the highest volume of transactions, with 35,310 deals closing in the residential market, breaking records in the year's first quarter. This demonstrates that the market lifted by 23.9% from the same quarter of 2023.

On the other hand, commercial properties have signified a positive momentum with considerable investments in retail units and office spaces, characterized by the augment of the retail sectors and tourism.

3. Off-plan vs. Secondary Market

Dubai’s off-plan market has shown record-high results, with a year-on-year increase of approximately 25.6% in value and 28.6% in volume.

Developers reported a surge in sales of new projects, specifically those that come with appealing post-handover incentives and flexible payment plans. More precisely, off-plan deals reached 20,565 in Q1 2024, making an ever-high record in the off-plan market.

Comparatively, Q1 of 2023 reported 15,998 transactions in the off-plan market, making Q1 2024 a 28.6% surge to the year prior. The substantial interest has been driven by key off-plan projects in Dubai Hills Estate and Emaar Beachfront.

Meanwhile, the secondary market of Dubai real estate saw steady growth, with buyers portraying confidence in ready-to-move-in and existing properties. This segment of the property sector experienced deals reaching a new record of 16,589.

This reflects a year-on-year increase of about 10.4%, whereas the transactions recorded in Q1 2023 were 15,029.

4. Rental Market Dynamics

Dubai's rental market also exhibited robust performance, with augmented demand for both residential and commercial units. The attractive rental yields are essentially appealing to investors with more demand in established communities.

The rental registrations reached a record-breaking height of 202,209, showing a year-on-year increase of 29.1%. The same quarter of 2023 demonstrated 156,696 rental registrations in the Dubai real estate market.

The share of rental contracts in Q1 of 2024 is around 61.9%, whereas 37.2% of registrations are recorded in the commercial sector. This makes the commercial rental market rebound due to the continuous developments of new business setups and resumed operations of the existing enterprises.

Key locations such as DIFC and Business Bay have shown high occupancy rates of 91.3% in Q1 2024 compared to 90.1% in Q1 2023. The influx of startups and multinational industries has driven the surge.

New Rental Contracts vs. Renewed Rental Contracts

Approximately 102,759 new rental contracts were registered in Q1 of 2024, showing a notable surge of around 21.3%. Conversely, the same quarter of the previous year demonstrated 84,694 new rental contracts.

Dubai’s rental market has also seen a great surge in renewed rental contracts in the first quarter of 2024, showing 99,450 transactions. This shows a notable performance of around 38.1%, higher than 72,002 renewed contracts of Q1 2023.

5. Regional Insight

Geographically, the popular residential communities of Dubai have exhibited the highest transaction volumes. In contrast, Business Bay topped for rental and sales apartments, followed by Downtown Dubai for the apartments’ purchase option.

Dubai Marina, Jumeirah Village Circle, and Palm Jumeirah successively contribute to the list of the highest sales of apartments.

At the same time, Al Furjan, Arabian Ranches, Dubai Hills Estate, MBR City, and Palm Jumeirah are in high demand for the sale of villas.

These prime locations benefitted from the high-end amenities, strategic locations, and high rental yields, making them an appealing choice for end-users and investors.

Median Value of Real Estate Transactions - Q1 2024

• Apartments worth AED 1.2 million experienced a YoY 2.3% increase.
• Villas worth AED 3.3 million saw a year-on-year 38.9% increase.
• Commercial units worth AED 1.3 million undergo a YoY 16.3% increase.
• Land worth AED 3.9 million experienced a YoY 37% increase.

6. Financing and Mortgage Trends

The mortgage and financing market grew by 3% in the first quarter of 2024, with more buyers opting for financing solutions due to flexible home loans and favorable interest rates.

The real estate transaction volume backed by mortgages is around 8,676, whereas the value reached AED 47.8 billion, a 52% YoY increase.

This surge is driven by the innovative mortgage products introduced by financial institutions and banks, designed to align diverse buying segments.

Hence, Dubai’s real estate market has been stimulating at an unprecedented rate, leading to an inclusive and dynamic environment.

Top 3 Projects with the Most Expensive Apartments Sold

1. BULGARI Lighthouse Dubai

Exhibiting versatility in layouts and designs, Bulgari Lighthouse Dubai encompasses highly sought-after residential penthouses and apartments.

The number of bedrooms ranges between 4 and 5, drawing inspiration from the serene natural landscape brilliantly incorporated within each floor of the 27-story building.

The transaction price of BULGARI Lighthouse has been recorded at AED 140 million, featuring a boastful development of Meeras in the prime area- Jumeirah Bay Islands.

2. Casa Canal

A premium-grade housing project developed by AHS Properties has significantly contributed to accelerating the city’s real estate transactions.

The transaction price of these affluent villas is stopped at AED 140 million, whereas residents will benefit from the stunning views of Al Safa Park and Dubai Water Canal.

The architectural design is a commendable projection of Killa Design Architects, with 3-6 bedroom layouts.

3. Como Residences

The most enthralling off-plan project of Nakheel, Como Residences, is soon to attract record-breaking transactions, with the transaction price already reaching AED 96 million.

This 71-floor high-rise tower is a testament to the city’s iconic residential landscape and features apartments, duplexes, and penthouses.

Dubai Market Growth: Trends and Predictions

1. Investor Demographics

The demographic profile of real estate investors in Dubai is diverse, with a noticeable increase in investment from Asian countries, specifically India and China. However, the traditional demographic markets remain active and sustainable with potential investors from Europe and GCC countries.

The versatility of Dubai’s environment, infrastructure developments, strategic location, and lucrative investment opportunities have driven the overall property sector of Dubai.

Furthermore, the introduction of the Golden Visa has encouraged long-term investment from entrepreneurs and high-net-worth individuals from across the globe.

2. Emerging Market Trends

Numerous trends have shaped the real estate sector of Dubai during the first quarter of 2024. With sustainability, the most pivotal factor, the incorporation of smart-home features has also become a critical factor for buyers and investors.

Projects integrating advanced technologies and green building initiatives are in high demand. For instance, District 2020 is tailored to align sustainable smart city features and is currently gaining potential consideration from serious buyers.

Additionally, the emerging interest in co-working and co-living spaces reflects the alteration in lifestyle preferences of the younger population.

3. Future Projections

Looking ahead, Dubai’s real estate market is poised to become more appealing as analysts expect consistent progress and advancement throughout 2024.

The demand is anticipated to grow with the ongoing infrastructure and sustainable developments. Projects like Expo City Dubai and Dubai Creek Harbor are predicted to stimulate further investment.

Moreover, the market is likely to gain an advantage from the UAE’s strategic initiatives that constantly draw enhancement through a diversified economy and innovation.

4. Opportunities and Challenges

The real estate market of Dubai might experience several challenges despite the potential trends. Dubai’s dynamic property sector is known for high quality and affordability.

However, the latter fact might be affected by hikes in interest rates and the increasing cost of construction materials.

Nonetheless, the authorities in Dubai are constantly introducing proactive approaches to mitigate these challenges, reflecting a commitment to maintaining a competitive real estate environment.

Opportunities proliferate in segments like luxury housing and affordable residential units, where demand continues to surpass supply.

Closing In

Dubai’s position in the global investment hub has heightened with the brilliant resilience demonstrated in the first quarter of 2024. The city’s dynamic and vibrant real estate market underscores a surge in transaction volumes, with favorable economic indicators and robust market drivers.

Innovative financing solutions and regulatory improvements have further bolstered Dubai’s real estate value, with investors showing steady confidence in the market.

The future of this metropolis appears promising due to the continuous evolution and adaptation of market dynamics.

This pivotal momentum is expected to remain towering with ongoing developments and strategic initiatives, sustaining Dubai’s position as one of the top destinations for real estate investment.

The detailed examination of Dubai's real estate market growth in Q1 2024 highlights the key aspects while ensuring an in-depth analysis of trends and transactions that shaped the first quarter of 2024.