Dubai's Housing Market Continues to Show Record Growth Rates. Analysis From REALTING

Dubai has been and remains a city with huge investment potential, and real estate investments are one of the most profitable enterprises not only in this emirate but also in the United Arab Emirates as a whole. Let's consider what situation has been established in the Dubai residential real estate market after three quarters of 2024.

Number of Transactions for Three Quarters of 2024

According to the Dubai Land Department, a total of 136,831 residential property sales and purchases were registered for Q1–Q3 2024, which is more than for the entire 2023. It is safe to say that 2024 will be another year of record-breaking performance for Dubai's residential property market.

In more detail, from January to September 2024, 17,652 thousand square meters were sold in residential real estate transactions, the cash turnover from the sale of which amounted to 76,379 million USD.

The market structure is dominated by purchase and sale transactions with apartments — their share according to the results of Q1–3 of 2024 amounted to 85% of the total number of transactions. The remaining 15% were transactions with villas.

Structure by type of transactions: 82% of registered transactions are purchase and sale transactions using own funds, 15% are transactions with borrowed funds and mortgage lending, and 3% are donation transactions.

It is worth noting that transactions with borrowed funds are most often carried out when buying villas. In Q1–Q3, 2024, about 30% of villa transactions were made using borrowed funds. In turn, in apartment purchase and sale transactions, the share of transactions involving borrowed funds over the past 3 quarters was 12%.

Housing Prices in Dubai

Above is a graph of changes in residential property price indices according to the Dubai Land Department. The graph does not include indices for Q2 and Q3 2024, as the Land Department has not published them.

The apartment price index for Q1 2024 was set at 1800, an annual increase of 15.7%. The villa price index was set at 1643, an annual increase of 25.0%.

Along with the residential property price indices, the Dubai Land Department provides statistics on the average price of an apartment and villa for Q1 2024. Thus, the average price of an apartment in Q1 2024 was USD 400,799, which is 2.9% more than in Q4 2023 and 12.5% ​​more than in Q1 2023. The average price of a villa in Q1 2024 was USD 765,971, which is 6.6% more than in the previous quarter and 24.8% more than a year ago.

Apartments

In total, 116,833 apartment purchase and sale transactions were made in Q1-Q3 2024: Q1 — 33,025 transactions, Q2 — 38,581 transactions, Q3 — 45,227 transactions. In the structure of apartment transactions, the share of real estate at the construction stage (Off-Plan real estate) is growing; in Q1 2024, the share of such properties was 54%, in Q3 2024 it was already 60%. Consequently, the share of transactions with existing real estate is decreasing.

According to the results of Q3 2024, the average price for finished apartments (Existing Properties) was 3242 USD/sq.m., compared to the beginning of the year, the average price decreased by 4.5%.

The average price for apartments under construction/projected (Off-Plan Properties) was set at USD 5435/sq.m, which is 1.9% more than in Q1 2024.

Villas

In total, 19,998 purchase and sale transactions with villas were made in Q1–Q3 2024: Q1 — 5524 transactions, Q2 — 6101 transactions, Q3 — 8373 transactions. In Q1 and Q2 of this year, transactions with completed properties prevailed in the structure of transactions with villas (68% and 64%, respectively), but in Q3 their share significantly decreased to 49%, while the share of transactions with villas under construction increased to 51%. The average price per square meter in an already-built villa at the end of Q3 2024 was USD 3108/sq.m, which is 11.4% more than in Q1 2024. The average price per square meter in an Off-Plan villa was set at USD 3,974/sq.m, which is 7.3% more than in Q1 2024.

Record activity in Dubai residential property market, and steady growth in prices for apartments and villas are indicators that Dubai remains highly attractive to potential investors.