Increasing demand for properties reflects dynamic market sentiment, bolstered by significant increases in transaction prices and volumes
H1 2024 recorded more than 43,000 property sale transactions in Dubai amounting to nearly AED 123 billion
Bayut, the leading property portal in the UAE, has released insights into the most searched areas in Dubai’s real estate sector for the first half of this year. Following what looked like post-New Year stability in early Q1 2024, property prices in Dubai’s most searched-for areas have risen again, countering any speculations of a slowdown.
Despite the ongoing increase in property prices, Dubai remains highly affordable compared to other luxury real estate destinations worldwide, making it an attractive option for new and institutional investors, solidifying the city’s position as a global investment hub.
Trends for Buying Properties in Dubai
Bayut’s data indicates that sales prices for apartments and villas in prominent Dubai neighbourhoods have recorded significant increases, with the highest increase reaching up to 17% for villas in The Valley by Emaar, during the first half of 2024.
Prospective homebuyers and investors for affordable properties have shown heightened interest in areas such as International City, Dubai South, DAMAC Hills 2, and The Valley by Emaar. Individuals looking for mid-range properties have gravitated towards neighbourhoods such as Jumeirah Village Circle, Jumeirah Lake Towers, Al Furjan, and The Springs. Conversely, investors interested in luxury properties have focused on the myriad of options available in Dubai Marina, Business Bay, Arabian Ranches, and Dubai Hills Estate during H1 2024.
Transactional sales prices for affordable apartments in highly searched areas have generally decreased by up to 18%, while villas in DAMAC Hills 2 have recorded a significant increase of over 41%. This price hike is likely due to heightened local and foreign demand for affordable homes in the emirate.
In the mid-tier property segment, there has been a noticeable increase in average sales transaction prices for apartments, varying from 12% to 40%, with the most significant growth observed in Jumeirah Lake Towers. Similarly, sought-after areas featuring mid-tier villas have observed increases in average transaction sales prices ranging from 4% to 23%.
Most areas in the luxury property segment have consistently recorded increases in transactional prices, ranging from 5% to 24%.
According to data from Bayut’s Dubai Transactions, which leverages meticulously processed information from the DLD, the first half of 2024 saw a total of 43,075 property sale transactions. These transactions amounted to a combined value of AED 122.9 billion, covering both residential and commercial properties.
In terms of Return on Investment (ROI) based on projected rental yields for apartments, areas such as Dubai Investments Park (DIP), Discovery Gardens, and Remraam have emerged as top choices for potential investors seeking affordable properties, offering yields of up to 11%. For mid-tier apartments, Dubai Sports City, Dubai Silicon Oasis, and Motor City are particularly attractive, with rental yields surpassing 9%. Additionally, luxury apartment locations such as Green Community, Al Sufouh, and DAMAC Hills have shown impressive returns of up to 9%, outpacing many global markets.
Bayut’s analysis of ROI trends for villa communities also shows a positive outlook. Buy-to-let villas in International City offer an average ROI exceeding 7%, making them attractive for investors. Areas such as DAMAC Hills 2 and Wasl Gate provide ROI percentages above 6%. Mid-tier villas in Jumeirah Village Triangle, Jumeirah Village Circle, and Mudon have projected ROIs ranging from 6% to 8%. In the luxury villa market, The Sustainable City stands out with an ROI exceeding 7%, due to the unique features of the properties and limited market supply. Additionally, communities like Tilal Al Ghaf and Al Barari, which cater to family needs, present strong ROIs of over 6%.
Read more: The Emergence of Amenity-Rich Residences in Dubai’s Real Estate Space
Trends for Renting Properties in Dubai
Bayut’s data analysis indicates notable increases in advertised rental prices across various segments in popular areas. Affordable apartment rentals have seen surges ranging from 4% to 31%, with studio flats in Al Nahda reporting the most significant price hike. Mid-tier apartments on the other hand, have experienced upticks of up to 15%. Luxury apartment rentals have generally increased by up to 7%, however some units in Business Bay and Downtown Dubai reported price decreases of under 6%.
Budget villa rentals have gone up by as much as 12%. Mid-tier villa rentals have increased by up to 15%, with certain bed types in Town Square seeing price decreases of under 1%. Luxury villa rentals have surged by up to 27%, with DAMAC Hills recording the highest increase for its limited inventory of 6-bed units.
For those seeking affordable accommodation, Deira and Al Nahda have become popular choices for apartments, while DAMAC Hills 2 and Mirdif have attracted interest for villas. In the mid-tier segment, Jumeirah Village Circle (JVC) and Bur Dubai apartments have remained in high demand among tenants, whereas properties in Town Square and JVC have appealed to those in search of villas. In the luxury category, Dubai Marina and Business Bay have maintained their popularity for apartment rentals, while Dubai Hills Estate and Al Barsha have been the desired destinations for high-end villa rentals.
Transactional rental prices in affordable neighbourhoods for both villas and apartments have generally increased by 2% to 9%. Mid-tier segment apartment and villa rentals have reported increases of up to 10%. In the luxury segment, transactional prices for both apartment and villa rentals have also risen by up to 10%.
As evident from the data, there has been a notable surge in demand for both apartments and villas, accompanied by significant increases in transaction prices and volumes. This rising trend in property prices reflects a dynamic market sentiment. The accelerating growth confirms that, despite broader economic challenges such as global inflation, Dubai continues to be a premier destination for real estate investment.
