Dubai’s real estate market in 2024 is stable yet lively, and it’s growing in appeal for both investors and private buyers. Despite predictions that the UAE’s inclusion on the FATF gray list in March 2022 would drive capital away, the market continues to thrive. The balance between supply and demand hasn’t been met here yet, and it doesn’t look like it will be anytime soon.
Market Overview
In Dubai, the property market has shown remarkable resilience and growth. Amidst global geopolitical and economic uncertainties, investors have turned to Dubai’s market for its stability and potential for high returns. The performance across various sectors including hospitality, residential, office, retail, industrial, and logistics has been particularly strong. For instance, the luxury property segment registered a significant 56% year-over-year growth, with Palm Jumeirah standing out as the top-performing community.
Population and tourism growth
As of June 2023, Dubai’s population crossed 3.6 million, marking a 1.4% year-to-date increase compared to the previous year. The number of tourist arrivals also saw a significant boost, reaching 15.4 million from January to November 2023, which is a 19.9% growth. This influx of residents and visitors has a direct impact on the demand for real estate, from residential to hospitality and retail spaces.
Economic indicators
In the first half of 2023, Dubai’s economy displayed a robust surge of 3.2%, with the gross domestic product (GDP) reaching AED 223.8 billion. This progress was bolstered by a significant 3.6% increase in the second quarter. The transport and storage sector was a standout performer, registering a remarkable 10.5% growth, which was the highest among all sectors. What is more, the services sector confirmed Dubai’s status as the fastest-recovering destination globally, with the transportation and storage sector contributing a substantial 42.8% to the overall growth. These economic achievements align with the objectives of the Dubai Economic Agenda D33, aiming to double the GDP over the next decade and position Dubai among the world’s top three urban economies. The positive trajectory of these sectors indicates a favorable atmosphere for further real estate investment and development.
Residential market
In 2023, transaction levels in Dubai’s residential market reached new heights. Sales prices and rents increased by 18% and 26% respectively compared to the previous year. Villas experienced a higher price growth rate than apartments, reflecting a strong demand for more spacious living options. Rent increases have kept pace with the growth seen before the pandemic, indicating a sustained market recovery. The introduction of approximately 20,000 new properties in 2024 is expected to moderate the growth rate, providing a more balanced market dynamic. On the whole, the overall economic health of Dubai, with a GDP growth of 3.2% in the first half of 2023, supports the ongoing demand in the real estate sector.
Hospitality market
Throughout 2023, Dubai’s hospitality sector has shown an impressive recovery, with key performance indicators surpassing those of the previous year. The average occupancy rate in Dubai was 77%, a notable increase from the 72% recorded in 2022. The average daily rate (ADR) saw a slight rise of 0.2% year-over-year, reaching AED 692. This is higher compared to most regional and international markets, which reflects the strength and resilience of Dubai’s hospitality industry.
In support of this growth, the UAE’s hospitality and hotel scene is anticipating a strong year, with as many as 92% of consumers planning to stay in a hotel in Dubai in 2023, up 37% from the previous year. The nation registered the highest hotel occupancy rate among GCC countries, with Dubai’s year-to-date November average daily rate increasing by 22% from AED 550.87 in 2021 to AED 674.25 in 2022.
Office market
In 2023, Dubai’s office rental market saw a remarkable upswing, with rents surpassing pre-pandemic figures by 17% compared to the previous year. This surge is part of a broader economic growth trend in Dubai, which has been forecasted to continue its positive trajectory. The city’s commitment to fostering a business-friendly environment is evidenced by various initiatives aimed at simplifying business operations and encouraging investment.
Thus, the demand for office space in Dubai has reached new heights, with city-wide office occupancy levels hitting 89% and Grade A office occupancy at 92%.
Retail market
Malls continue to be the dominant retail format in Dubai, persisting despite the global surge in online shopping. This is largely due to the preference among tourists to visit retail and leisure destinations. The outlook for Dubai’s retail sector remains optimistic, with retail sales projected to grow by 6% between 2025 and 2027.
Industrial and logistics market
Warehouse rents in Dubai rose year-over-year, driven by strong demand from various industries including manufacturing, third-party logistics (3PL), and e-commerce. Growth opportunities are expected to continue for industrial properties in Dubai, supported by economic forecasts, particularly with the expansion in the transport and storage sector.
Investment opportunities
Despite the influx of new developments, the demand for real estate in Dubai continues to be strong, offering a golden chance for investors to benefit from the off-plan market. With the anticipation of approximately 20,000 new properties entering the market in 2024, the real estate sector is poised for significant growth. Actually, it is about to expand by around 15% in 2024, signaling a strong year ahead for both residential and commercial investments. This growth is further supported by the expansion of Dubai International Airport as well as the construction of new hotels, resorts, and shopping centers, all of which contribute to the overall growth and stability of the market.
Expert assistance with purchasing Dubai real estate
If you’re about to purchase properties in Dubai at unbeatable value, go ahead and reach out to the International Wealth team. This way, you will enjoy comprehensive expert support throughout the entire transaction process!
For more information about the Emirates and how to buy real estate there, you are welcome to visit the International Wealth website. On the site, you will also find lots of valuable recommendations on company registration, opening bank accounts, obtaining licenses, acquiring foreign citizenship, and safeguarding your assets.
