Dubai’s booming real estate market continues to show remarkable maturity, with new data revealing significant trends in the third quarter of 2024. According to a report by the ValuStrat Price Index (VPI), residential capital values rose by 6.7% quarterly and 28.9% annually, driven by record transaction volumes and an evolving focus on affordable properties.
The VPI, which tracks capital values based on a baseline of 100 points set in Q1 2021, reached 190.1 points by the end of Q3. The index highlights how Dubai’s property market has evolved, with the villa market outperforming apartments, though apartments on Palm Jumeirah have shown strong gains.
Villa Market Growth Outpaces Apartments
Villas in Dubai have continued to dominate the market, with capital values reaching 243.2 VPI points, a 33.1% year-on-year increase and 7.4% quarterly rise. Popular areas like Palm Jumeirah (42.8%), Jumeirah Islands (42.3%), and Emirates Hills (33.8%) led the way in villa value growth. However, some communities, such as Mudon and Jumeirah Village Triangle, saw more modest increases of around 20%.
In contrast, apartments, which make up 80% of Dubai’s housing stock, have seen slower growth. Palm Jumeirah was the standout performer, being the first area where apartment prices surpassed 2014 peaks. Annual growth in apartment values stood at 24.8%, with Discovery Gardens (33.5%) and The Greens (33%) among the top performers. However, some areas, like Jumeirah Beach Residence and Dubai Sports City, posted slower gains below 18%.
Shift Towards Affordable Housing
One notable trend in the Q3 data was the shift toward affordable housing. ValuStrat reported that 41% of all ready home sales were priced below Dh1 million, reflecting growing demand for mid-market and affordable properties. The average ticket size of ready properties fell by 9.2% quarterly, stabilizing at Dh2.3 million annually.
The citywide average transacted price for off-plan properties was Dh19,537 per square meter, while ready units were priced at Dh15,414 per square meter. Off-plan property transactions reached an all-time high, with 32,968 deals recorded, up 97% year-on-year, indicating strong investor confidence in Dubai’s future growth.
Luxury and Mortgage Transactions
While the market saw a shift towards more affordable homes, the luxury segment also remained active. There were 53 sales of homes worth over Dh30 million in Q3, slightly down from 62 in the same period last year. However, the overall market for high-end villas and apartments continued to thrive, driven by demand for prime locations and properties with exceptional amenities.
Mortgage transactions also saw a notable increase, with 10,118 deals recorded across all asset classes, contributing Dh19 billion in total sales value. Cash transactions accounted for Dh28 billion in ready property sales, highlighting Dubai’s diverse investment landscape.
According to Haider Tuaima, head of real estate research at ValuStrat, “Dubai’s property market experienced extraordinary progress in Q3 2024, driven by record population growth and falling interest rates.”
