Average property prices jump 20% in a year as Q3 sales pass $32bn; office, retail and industrial rents in focus
Dubai property prices increased by an average of 20% in Q3 2024, with total residential sales exceeding AED 120 billion ($32.4 billion), according to the CBRE Middle East UAE Real Estate Market Review. The residential market demonstrated solid performance, with average prices rising nearly 20% compared to the previous year, supported by a 19% increase in average apartment( prices and a 23% increase in average villa prices. Rental growth has also been significant, with average apartment rents rising by 19% and villa rents by 13%. The number of registered rental contracts has grown year-on-year, primarily due to a 14% increase in renewal contracts, although new registrations saw a slight decline.
In the nine months leading to September 2024, the total number of residential transactions surpassed 125,000, marking a 36% increase compared to the same period in 2023. Residential sales values totaled AED 86 billion ($23.4 billion) for off-plan transactions and AED 33 billion ($9 billion) for ready properties. Q3 alone accounted for around AED 120 billion ($32.4 billion) in residential sales, representing over a 30% increase from the same quarter the previous year. Given the current limited supply, the performance in Dubai’s residential sector is expected to remain positive for both sales and rentals.
The office sector continues to thrive due to a robust non-oil economy, which is driving employment and contributing to growth in registered commercial leases. Limited new office deliveries have led to a landlord-friendly market, putting upward pressure on occupancy rates and rental prices. By the end of Q3, the average occupancy rate of tracked assets was approximately 93%, up from 92% a year earlier. Average rental rates for office spaces increased significantly, with Prime rates growing by 11%, Grade A by 21%, Grade B by 24%, and Grade C by 19% compared to Q3 2023.
The hospitality sector has also seen success, with Dubai setting new monthly visitor records in 2024, and the number of international visitors increasing by 9.9% to 8.12 million in the first half of the year. Average daily room rates (ADRs) have shown a 3% year-on-year increase. In the retail market, strong performance persists with limited available supply, leading to a 3% increase in average rental rates. However, the supply of new retail spaces remains below historical norms due to delays in large-scale projects.
The industrial and logistics sectors continue to benefit from favorable market conditions, with rising rental prices and increased demand for quality assets, particularly in prime areas of North Dubai. Industrial Ejari registrations have grown by 5% year-on-year, with new leases increasing by 4% and renewals by 6%.
The UAE real estate market is strong, with record residential activity and growing rental and occupancy rates in the commercial office sector. However, a shortage of short-term supply poses challenges that could raise living and business costs. Despite this, the buoyant non-oil economy is expected to support ongoing real estate growth in the next year.
