Dubai Property Prices Surge in 2024, Limited Supply
The Dubai housing market continued its strong growth in the second quarter of 2024, with property prices rising by 21.3% over the past year. This trend is attributed to limited supply and the strengthening "buy-to-stay" phenomenon, as revealed in an analysis by a global real estate consultancy firm.
Average home prices rose by 21.3% over the past 12 months, with villas outperforming apartments. Villa sale prices increased by 24.3%, reaching 1,896 dirhams (Dh) per square foot, which is 28% higher than the 2014 peak. According to the Q2 2024 Dubai Residential Market Report by Knight Frank, continuous demand for standalone waterfront houses and branded residences contributes to the growth. The "2024 Destination Dubai" report indicated that international buyers are primarily attracted by access to green spaces, wellness centers, and waterfront locations.
The luxury housing market also showed strong growth, particularly in the areas of Palm Jumeirah, Jumeirah Bay Island, Jumeirah Islands, and Emirates Hills, collectively known as "Premium Dubai." Here, a 7% price increase was recorded, averaging 3,706 dirhams per square foot by the end of the first half of 2024. In terms of sales, Palm Jumeirah led with 853 homes sold, representing 89.3% of premium transactions in the first half. Jumeirah Islands took second place (5.03%), followed by Jumeirah Bay Island (3.56%) and Emirates Hills (1.05%).
Faisal Durrani, Head of Research in the MENA region, highlighted that the trajectory of rising property prices in Dubai remains unchanged, reflecting sustained demand from both domestic and international buyers. "The shift in buyer preference—from purely investment-driven purchases to those intended for personal use—reduces the number of properties available on the market, further driving up prices which have been rising for 21 consecutive quarters," said Durrani.
In the second quarter of 2024, the number of available homes decreased by 22.8% compared to the previous year, falling below 100,000 unique home listings in a single quarter for the first time since the first quarter of 2022.
The supply of luxury properties has tightened even more: the number of available homes in Palm Jumeirah, Emirates Hills, Jumeirah Bay Island, and Jumeirah Islands decreased by 47% over the past 12 months, leaving only 2,851 residential properties. "The decrease in the number of homes in the city demonstrates that buyers are increasingly purchasing properties for their own use or as holiday homes and second residences. This shift in mindset reflects the market’s maturity, further enhancing its appeal to additional buyers and investors," added Petri Mannila, Head of the Prime Residential division in the UAE.
Knight Frank has updated its forecast for the number of residential properties to be completed by 2029. Currently, a total of 308,099 housing units are planned or under construction, with 82% being apartments and the remainder being villas. This means an average of 51,350 homes per year over the next six years, exceeding the long-term average of 30,000 homes per year. However, this figure still falls short of the 73,000 homes per year estimated by Knight Frank, which would be needed to accommodate Dubai's planned population of 7.8 million by 2040, especially given that annual completion delays can reach 30-40%.
