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The UAE real estate market is increasingly becoming a mid-income and affordable housing market, with 40% of ready home sales priced below AED 1 million, or about $272,000, according to a recent report from ValuStrat.
The report, led by Haider Tuaima, Director and Head of Real Estate Research at ValuStrat, measures steady growth across the residential, commercial, and hospitality sectors.
In the third quarter of 2024, the Dubai Property Market recorded spectacular growth as increased population and a decline in interest rates pegged property sales and mortgage applications at all-time highs, while office and warehouse prices achieved new records. The trend toward affordability is further emphasized by decreasing average home sizes, marking the first dip in the sales price per square foot this year.
Top Affordable Communities in Dubai
- International City
- Jumeirah Village Circle
- Dubai Sports City
- Dubai Silicon Oasis
- Emaar South
The ValuStrat Price Index announced that residential property values have increased year-on-year by 28.9%, with freehold villa communities reaching new highs. Over the last two years, nearly all villa prices have more than doubled, while the prices of villas and townhouses are showing an annual growth in price of 33.1%. Apartment prices similarly grew by 24.8%, higher than the previous quarter’s 23.4% growth.
On the other hand, rental-wise, apartment rates increased by 15.4% over the past year, outperforming villas in Dubai, which only increased by 4.9%. Office space demand is still strong, and hopes are high, as capital values increased by 2.6% quarterly, driving annual growth to 25.8%, while office rent increased by 20.8%. Likewise, logistic warehouses went to an annual 14.6% and climbed by 5.2% from the previous quarter, which is why business expansions happen with the coming of new companies.
Dubai’s hospitality industry is considered to be on fire! It has more hotel keys than other cities like London, Paris, and New York, with numbers getting close to those in Tokyo and Las Vegas. Growing tourism is blamed for high occupancy throughout the year.
