Dubai, UAE – Dubai’s real estate market continues its upward trajectory, with house prices rising by 4.8% in Q2 2023, marking the 10th consecutive quarter of growth, according to a report by global property consultant Knight Frank. This growth trend has led to an average increase of 24% in residential property values over the current property market cycle.
Key highlights from the report include:
Apartment prices have risen by 21% since January 2020, averaging AED 1,290 per square foot.
Villa prices have experienced stronger growth, increasing by 51% over the same period, with an average price of AED 1,520 per square foot.
Despite the price increases, city-wide property values are still 11% below their 2014 peak.
Prime neighborhoods like Jumeirah Bay Island, Emirates Hills, and Palm Jumeirah have seen extraordinary growth, with villa prices up by 125% since January 2020.
The Palm Jumeirah stands out as a star-performing villa market, with prices growing by 44% over the past year.
Off-plan sales are on the rise, accounting for over 50% of sales, with end-users and second-home buyers dominating the market.
While supply remains tight in prime areas, the construction pipeline for new homes across Dubai is expanding, with around 85,200 homes expected to be delivered by the end of 2028.
The positive sentiment in Dubai’s real estate market is driven by factors like international demand, economic growth, and population projections, with Dubai’s population expected to approach six million by 2033.
The rental market in Dubai has closely followed the trend of sales prices, with rental growth remaining in line with sales price trends, avoiding yield compression. Rental prices have risen by 22.3% since the previous summer.
Dubai’s real estate market continues to experience growth driven by sustained demand, both from international buyers and domestic purchasers, particularly for luxury second homes. The market dynamics suggest that the growth trend is likely to continue, especially for villas, while the rental market remains closely aligned with sales prices. The long-term outlook also considers Dubai’s positive economic sentiment and population projections.