Dubai property prices skyrocketed by up to 41 percent during the first half of 2024, according to a new report by leading real estate portal Bayut.
The surge in real estate prices was particularly evident in the villa segment of the market.
The report revealed that villas in DAMAC Hills 2, an area popular among investors seeking affordable properties, recorded the most significant price increase at over 41 percent, reflecting the heightened local and foreign demand for affordable homes in the emirate.
Dubai real estate market overview
Despite ongoing price increases, Dubai remains highly affordable compared to other luxury real estate destinations worldwide.
The first half of 2024 saw more than 43,000 property sale transactions in Dubai, amounting to nearly AED123 billion. This robust activity indicates strong market sentiment and growing investor confidence in the emirate’s real estate sector.
The affordable segment of the property market saw dramatic price increases driven by significant investor interest in villa communities, with DAMAC Hills 2 recording the highest. The Valley by Emaar reported a 17 percent increase in villa prices.
However, apartment prices in the affordable segment showed a different trend, with transactional sales prices decreasing by up to 18 percent in some highly searched areas.
The mid-tier segment demonstrated consistent growth across both apartments and villas. Average sales transaction prices for apartments increased between 12 percent and 40 percent, with Jumeirah Lake Towers recording the most substantial growth. Villa prices in this segment rose between 4 percent and 23 percent.
The luxury market segment maintained its upward trajectory, with most areas recording increases in transactional prices ranging from 5 percent to 24 percent. This growth reaffirms Dubai’s appeal to high-net-worth investors and luxury property seekers.
“Amidst the global economic slowdown and rising interest rates, we have noticed a pattern of investors worldwide turning to wealth-preserving assets,” said Haider Ali Khan, CEO of Bayut and Head of Dubizzle Group MENA.
“Dubai’s real estate sector has emerged as a standout choice in today’s economic climate, with prices and consumer interest continuing to rise even after a 24-month period of continuous growth.”
The report found that despite the price increases, Dubai continues to offer attractive returns on investment (ROI). Affordable apartments in areas such as Dubai Investments Park, Discovery Gardens, and Remraam offer projected rental yields of up to 11 percent. In the mid-tier and luxury segments, several areas promise returns exceeding 9 percent, outpacing many global markets.
For villa investments, areas like International City offer average ROIs exceeding 7 percent, while luxury communities such as The Sustainable City boast ROIs of over 7 percent due to unique property features and limited market supply.
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