Dubai’s residential market continues to show strong growth, with property values rising by 21.3% over the past year, now standing at AED 1,573 psf, according to the Q2 Dubai Residential Market Review report from global property consultant Knight Frank. This places the average prices 6.4% above the 2014 peak.
On average, villa sale prices have grown by 24.3% over the last 12 months, reaching AED 1,896 psf, putting them 28% above the 2014 peak. This growth, Knight Frank says, illustrates the enduring appeal of stand-alone, beachfront homes and branded residences that offer almost instant access to the Dubai lifestyle. Knight Frank’s 2024 Destination Dubai showed that access to greenery, wellness centres, and waterfront locations are the top factors attracting the international buyers.
Faisal Durrani, Partner – Head of Research, MENA, explained: “The trajectory of home values in Dubai remains unchanged, highlighting the enduring demand from domestic and international buyers for homes in the city. The change in the nature of buyers however, from being purely investment driven, to those looking to purchase for personal reasons is eroding the number of listings in the city, which is also contributing to the sustained price rises which have continued for 21 quarters.
“Indeed, the number of residential listings in Q2 2024 fell by 22.8% compared to the previous year, and for the first time since Q1 2022, the number of unique home listings in a single quarter has fallen below 100,000”.
The decrease in luxury home supply was even more pronounced, highlights Knight Frank. The number of homes available for sale in Dubai’s four prime residential communities of the Palm Jumeirah, Emirates Hills, Jumeirah Bay Island and Jumeirah Islands has fallen by 47% over the last 12 months to 2,851 properties.
Petri Mannila, Partner – Head of Prime Residential, UAE added: “The fall in the number of homes available for sale in the city reflects the increasing ‘buy-to-stay’ and ‘buy-to-hold’ mentality among purchasers. Buyers are increasingly purchasing these properties to use as their primary home, or for use as a holiday home or second home. This significant shift in the mentality of buyers reflects the growing maturity of the market, which will further broaden its appeal to even more buyers and investors”.
UPCOMING SUPPLY: Knight Frank has updated its total pipeline of residential units scheduled for completion by 2029. The total number of homes planned or under construction now stands at 308,099 units. Of these, 82% will be apartments, with the remainder being villas. This translates into an average of approximately 51,350 homes per year for the next six years, higher than the long-term completion rate of around 30,000 homes per year.
The figure still falls short of the 73,000 homes per year Knight Frank estimates is needed for the next 16 years to accommodate Dubai’s vision of a population of 7.8 million population by 2040, especially when factoring for the 30-40% completion delays in any given year.
PRIME HOMES MARKET: Dubai’s luxury residential sector has also witnessed a strong growth, according to Knight Frank. The Palm Jumeirah, Jumeirah Bay Island, Jumeirah Islands, and Emirates Hills, collectively known as ‘Prime Dubai’, saw a 7% increase in average transacted prices, which stood at AED 3,706 psf at the end of H1 2024.
With 853 homes sold, Palm Jumeirah once again accounted for the lion’s share of prime deals in H1 2024, at 89.3%. It was followed by Jumeirah Islands (5.03%), Jumeirah Bay Island (3.56%) and Emirates Hills (1.05%).
