Dubai’s real estate market is experiencing a major housing boom, with tens of thousands of new villas, townhouses, and apartments set to be completed and handed over to buyers this year.
Despite the huge influx of new units, experts predict property prices for both rents as well as ownership will continue to rise due to strong demand from local and foreign buyers.
Surge in new supply
Zarah Evans, owner and managing partner of Exclusive Links Real Estate Brokers, told Al Arabiya English: “In 2024, Dubai’s real estate market continues its growth trajectory, with new developments contributing to an increasing inventory.”
She said the luxury villa market is growing, with tens of thousands of lavish properties slated for completion in 2024 across various Dubai communities. One villa project creating a buzz is Damac Hills, which is extending its existing community with contemporary three to seven-bedroom homes equipped with amenities such as pools, gyms, and children’s play areas. Meanwhile, Mohammed Bin Rashid Al Maktoum City — District One is also gearing up to launch spacious 2,500-4,200 sq ft three to five-bedroom villas in District 11, featuring panoramic park views.
Further out near Arabian Ranches 3, The Valley by Emaar is marketing itself as a “charming town” amidst the desert landscape and green spaces. The development will have three to five-bedroom villas and various amenities such as a beach, park, and a 20,000-square-meter sports village. The Oasis is also near Arabian Ranches 2, a vast 100 million sq ft area with more than 7,000 units and four golf courses. The developer says the price of four to five-bedroom villas start from $2.2 million (AED 8.1 million).
Evans said another hot new destination is Dubai South’s residential district, which comprises three to seven-bedroom semi-detached villas and mansions.
She added: “In 2024, 35,000 projects are scheduled for handover, fueling the market’s growth and presenting promising opportunities for high return-on-investment potential.”
Faisal Durrani, Head of Research, MENA, at Knight Frank, told Al Arabiya English that 26,154 homes will be delivered in 2024, increasing slightly to 32,667 units in 2025. He estimates around 110,000 units will be completed between now and 2028.
Durrani said some key handovers anticipated in 2024 include Downtown Dubai, which is set to welcome 380 new branded residences in Vida Residences Dubai Mall Tower, with an expected handover in October 2024. The luxury high-rise will offer views of Burj Khalifa and the Dubai Fountain.
Out in Dubailand, the new Rukan community by Egyptian developer Continental Investments is expected to deliver 1,299 family-friendly villas in December. In Deira, the massive Jewel of the Creek development has part-unveiled a second phase comprising 1,260 new apartments in February. Jewel of the Creek offers a unique creekside location and a vast array of amenities across one million square meters.
Out in the Tilal Al Ghaf community, 808 villas are set for handover this May at the resort-inspired Aura development. Homebuyers can choose from four-bedroom twin villas or three and four-bedroom options, with a wealth of resort-style amenities, from parks and pools to jogging trails.
In the bustling Business Bay district, Regalia Residences is gearing up to deliver 900 new apartments this December, ranging from studios to penthouses.
Surging prices amid strong demand
Despite the vast supply pipeline, real estate consultants predict property prices will continue to surge in 2024 amid strong demand from local and foreign buyers.
Evans says: “In January 2024, property prices reached all-time highs, at $349 (AED 1,284) per sq ft, reflecting a steady upward trend. Emaar Properties led the off-plan market, recording significant transactions, notably in Dubai Hills.”
“Despite the influx of new supply, there’s anticipation of a moderation in price appreciation, particularly in the ready single-family homes segment of villas and townhouses, while ready apartments, especially in established communities, are expected to see more pronounced growth rates,” Evans added.
She further said: “The off-plan sector remains dominant, with just over 11,500 new units added in January alone. According to the January Property Monitor report, apartments comprise 93.3 percent of the new inventory by volume, while townhouses and villas constitute 6.2 percent and 0.5 percent, respectively, projecting a combined gross sales value of $8.4 billion (AED 31.1 billion).”
Evans forecasts moderate price growth of five to seven percent in 2024 and says demand is expected to remain strong for affordable one-bedroom apartments, especially among Emirati first-time buyers.
She added that improved infrastructure, such as the new Dubai Metro Blue Line extension, should further stimulate price growth in areas such as Dubai Silicon Oasis, Dubai Creek Harbour, and Ras Al Khor due to the enhanced transport link.
According to Evans, while this upward trend will continue in the first half of 2024, perhaps after the summer and into H2, there could be a change, but that will be more in the high-end luxury segment.
Key drivers of housing demand
Dubai’s population is set to proliferate from 3.7 million in 2022 to a projected 7.8 million by 2040, said Durrani. He added that, despite the tens of thousands of new homes, the market is still falling short of what it will need to cater to the swelling population, putting upward pressure on prices.
“Our supply tracker for the number of homes under construction showed that we can expect 110,000 units to be delivered by the end of 2028. This equates to 22,000 completions annually between now and then, below the historic rate of 30,000 handovers yearly.”
When factoring in the government’s population growth projections, it is estimated that as many as 70,000 homes may be needed annually between now and 2028, Durrani said, adding: “Currently, we are falling well short of this, suggesting that upward pressure on prices is likely to persist when looking at the supply-demand dynamics in isolation.”
Meanwhile, the UAE government aims to attract one million remote workers under its virtual working program. The country’s new visa system also now offers five and 10-year residency options and officials widened the eligibility net for long-term ‘Golden’ Visas, leading more expatriates to purchase rather than rent.
The surge in demand has been aided by an influx of people from around the world.
Earlier this month, hundreds of buyers queued overnight outside the offices of another developer, Nakheel PJSC, for a chance to buy more than 500 luxury waterfront homes, according to Bloomberg, which said in November, about 800 homes in a new Dubai residential development sold out within hours, generating $844 million for firms backing the project, including Abu Dhabi’s Aldar Properties PJSC.
Evans said eliminating the minimum down payment requirement for Golden Visa holders will also drive more investment and demand for housing units.
“Despite expectations of a moderation in price appreciation and a potential shift in market dynamics, the overall sentiment toward Dubai’s real estate market remains positive in 2024,” she said. “Sustained investor interest, coupled with ongoing developments and infrastructure projects, paints a promising picture for the market’s resilience and attractiveness to investors.”
This week, Savills global research anticipates infrastructure-focused developments driving economic growth in the Middle East in 2024, with the bulk of these forthcoming developments concentrated in the UAE and neighboring Saudi Arabia.
“The residential rental sector’s growth in the UAE is likely to moderate due to new launches and handovers, which is expected to improve supply. However, average price points have increased, and new benchmark prices for luxury properties set in 2023 are likely to stay,” a statement from the research firm said.
Meanwhile, ZāZEN Properties, a sustainable property developer in the UAE, cites that 15,489 sales transactions worth nearly AED 49 billion were logged in February 2024 across Dubai’s overall property market; the Dubai Land Department (DLD) attributes 6,600 of these entries to off-plan properties, equating to a value of $3.76 billion (AED 13.8 billion).
While the $13.3 billion (AED 48.99 billion) value of total sales transactions last month reflects a 16 percent decrease from January, Madhav Dhar, COO and founding member of ZāZEN Properties, says that off-plan properties below the $820,000 (AED 3 million) threshold will continue driving growth across the emirate as good quality affordable housing options become increasingly sought-after by residents.
Luxury developers launch ambitious new projects
There is a flurry of new developments expected in the emirate over the coming years as Dubai’s top developers continue launching ambitious luxury projects.
Emaar Properties is investing $21 billion across two massive developments — The Heights and Grand Club Resort — it announced this week.
Though few details were provided, The Heights will span 81 million square feet and cost $15 billion, while Grand Club Resort will be a $6 billion wellness retreat spanning 60 million square feet.
Nakheel has also been actively developing luxury waterfront communities. In September 2023, it began selling 800 beachfront villas at Palm Jebel Ali. In early 2024, it launched Rixos Hotel and Residences on the Dubai Islands, featuring apartments and beach homes.
Smaller developers are also capitalizing on the demand for luxury projects. In September 2022, ZāZEN Properties launched the LEED Gold and Well-certified ZāZEN Gardens development in Al Furjan.
A record 431 Dubai homes were sold for more than $10 million in 2023, nearly doubling the previous year’s tally and making it the largest such market in the world, according to research from property agency Knight Frank shared with Reuters.
Shift toward sustainable developments
Developers say sustainability is becoming a priority for Dubai homebuyers and tenants. ZāZEN’s Dhar noted the country’s “Year of Sustainability” initiative is reshaping real estate.
“Beyond affordable housing, UAE residents are also increasingly desiring sustainable homes for the future. The country’s growing focus on sustainability, exemplified by its decision to extend the ‘Year of Sustainability’ from 2023 into 2024, is driving this change to further reshape the real estate landscape,” Dhar said.
Nakheel’s current developments align with Dubai’s 2040 Urban Master Plan, which focuses on creating vibrant, healthy communities.
Emaar says its massive new projects will help “build a better future for humanity by championing sustainable development.”
