Dubai’s real estate market has always been a topic of global interest, and 2024 is no exception. As the market continues to evolve, recent data indicates significant trends and shifts that are reshaping the landscape for both renters and investors. According to the latest Dubai residential market note by CBRE, the market is witnessing a surge in property supply, which is expected to moderate rent price increases, although demand remains robust.

Demand Continues to Rise

Data from the Dubai Land Department reveals that the number of rental registrations up to May 2024 reached 255,178, marking a 5.9 percent increase compared to the previous year. This growth is primarily driven by a 12.2 percent increase in rental registration renewals, indicating that tenants in Dubai are choosing to renew their leases rather than seek new contracts, which saw a 3.7 percent decline. This trend reflects the continued rise in rental rates in key areas, pushing tenants to stay put to avoid higher costs.

Rent Prices: Growth Slows but Continues

Despite the increasing property supply, rent prices in Dubai have continued to climb, albeit at a slower pace. From the beginning of 2024 to May, average residential rent prices rose by 21.1 percent, slightly up from 20.8 percent in April. This increase is attributed to a 22.2 percent rise in apartment rents and a 13.1 percent hike in villa rents. The average annual rent for apartments stood at AED 126,598, while villas averaged AED 352,572.

Prime residential areas such as Palm Jumeirah and Al Barari recorded the highest rents, with average annual rents of AED 272,867 for apartments and AED 1,391,242 for villas, respectively. The high rent prices in core and prime areas have led to a spillover effect, causing significant rent increases in secondary communities.

Future Outlook: Moderated Growth

Looking ahead, CBRE forecasts that while rental rates will continue to rise, the pace will decelerate. The market is expected to see single-digit growth in rent prices as affordability constraints begin to impact tenants. This moderated growth is a sign of a maturing market, balancing supply and demand more effectively.

Record-Breaking Transaction Volumes

In addition to the strong rental market, Dubai’s residential sales market is experiencing unprecedented demand. May 2024 saw a record 15,766 transactions, a 44.2 percent increase compared to May 2023. Secondary market transactions rose by 5.7 percent to 5,065, while off-plan property transactions skyrocketed by 74.3 percent to 10,701.

From January to May 2024, the total volume of sales transactions reached 62,180, marking a staggering 384.3 percent increase compared to 2019. This volume also surpassed the 2023 record by 30 percent, driven by a 42.6 percent increase in off-plan sales and an 11.3 percent rise in secondary market sales.

Conclusion

Dubai’s real estate market continues to demonstrate resilience and robust performance. While rental growth is expected to moderate, the market remains attractive for investors and tenants alike. The remarkable increase in transaction volumes highlights the strong demand and investor confidence in Dubai’s real estate sector. As we move further into 2024, these trends indicate a promising outlook for the market, with opportunities for both seasoned investors and newcomers.