Dubai Heads for a Record Handover Year: 38,174 New Homes and Values Up by a Third

Dubai is estimated to register the handover of 38,174 new homes in 2024 as the real estate market of the United Arab Emirates booms, according to a report by consultancy ValuStrat. Capital values, rents and off-plan transactions all moved sharply higher in the second quarter, and the market cycle, in the consultancy's words, is in its upswing stage.

A record supply year takes shape

Total estimated completions as of the first half of 2024 stood at 6,939 apartments and 2,145 villas, equivalent to 20% of preliminary estimates for the whole of 2024, ValuStrat said. Notable apartment completions during the second quarter included Creek Views 1 and 2 with 634 and 587 apartments, while major villa completions included Murroj Al Furjan West with 161 units and Silver Springs 3 in Damac Hills with 258 villas. Of the projects in the pipeline, 10% are located in Jumeirah Village Circle and another 10% in Business Bay, followed by Jumeirah Lakes Towers with 5%.

"Dubai's real estate market continues to thrive with strong demand. The upwards trend in valuations and rents across various segments shows that the market cycle is in its upswing stage," said Haider Tuaima (Haider Tuaima), director and head of real estate research at ValuStrat. "As the market stabilises and matures, monitoring these trends and adjusting strategies accordingly will be crucial to maximising investment returns."

Prices: villas up by a third, apartments by a quarter

Dubai's villa market remained robust, with capital values marking an annual increase of 33.4% and a slightly higher quarterly growth of 7.3%. The top annual performers were Palm Jumeirah, Jumeirah Islands, Dubai Hills Estate and Emirates Hills. Apartment valuations also continued to rise, increasing by 5.4% quarterly and 23.4% annually, led by Discovery Gardens, The Greens, Palm Jumeirah, The Views, Al Quoz Fourth, Town Square and Dubailand Residence Complex. Notably, Palm Jumeirah surpassed the 2014 price peaks for apartments in Dubai — the first apartment location to do so.

The record rainfalls and flooding of April caused severe damage in many areas but did not significantly impact valuations in the subsequent months, Tuaima noted: the prompt response from master developers and authorities contained the damage in affected communities.

Transactions: cash beats mortgage, off-plan surges

In the second quarter the market witnessed 7,921 mortgage transactions across all asset classes compared with 13,834 cash transactions of ready properties, with mortgage sales value at Dh26 billion ($7.1 billion) and cash transactions totalling Dh35 billion. Off-plan registrations grew by 61.4% annually and 19.1% quarterly, equivalent to investments worth Dh59.9 billion. Ready secondary home transactions reached 11,508, down 1.7% quarterly but up 4.8% annually, worth Dh29.3 billion. Thirty-seven per cent of all ready home sales were priced below Dh1 million, compared with 40.8% a year earlier, and there were 55 sales above Dh30 million versus 63 in the same period last year. The most transacted locations were Jumeirah Village Circle, Business Bay and Dubai Marina.

Rents keep climbing

Dubai's residential rental values grew by 2.7% quarterly and 10.8% annually. Villa rents rose 1.1% quarterly and 3.5% annually to an average of Dh408,200 a year, while apartment asking rents grew 16.9% annually and 3.8% quarterly to an average of Dh89,100 — studios at Dh59,000, one-bed at Dh86,000, two-bed at Dh123,000 and three-bed at Dh193,000. Residential occupancy was estimated at 87.7% in H1 2024.

What stands behind the boom

The UAE property market has been booming on the back of government initiatives such as residency permits for retired and remote workers and the expansion of the 10-year golden visa programme, alongside overall economic growth from diversification. The surge in global wealth creation has added fuel: as affluent individuals seek to diversify and secure assets amid geopolitical volatility, Dubai has emerged as a prime destination — its luxury prime market hit a record last year as sales of $10 million-plus homes nearly doubled to $7.6 billion, outperforming London and New York, according to Knight Frank. Key markers to watch:

• Whether the 38,174-home handover estimate is met, given only 20% of it was completed by mid-year.
• Villa versus apartment value growth after the 33.4% and 23.4% annual jumps.
• The off-plan share of activity after a 61.4% annual rise in registrations.
• Rent growth sustainability at an 87.7% residential occupancy rate.

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