Dubai’s real estate market continues its impressive upward trajectory in 2024, with both residential and commercial sectors experiencing significant growth. According to the latest report by global property consultancy Knight Frank, residential property prices have climbed by 19.1% year-over-year, reaching an average of AED 1,685 per square foot. This surge has pushed property values 13.3% above their previous peak in 2014, highlighting the city’s enduring appeal among investors and end-users alike.
Villas Lead the Residential Market Growth
Villa prices have shown even stronger gains, rising by 20.2% over the past 12 months to an average of AED 2,009 per square foot—an astonishing 38.1% increase compared to the 2014 peak. The demand for standalone villas, beachfront properties, and branded residences remains high, with both local and international buyers driving the market.
Faisal Durrani, Partner and Head of Research for MENA at Knight Frank, noted, “Residential property values remain on an upward trajectory, with demand showing no signs of abating.”
Supply and High-End Housing Market Trends
Dubai’s residential construction pipeline remains robust, with approximately 302,880 new units set for completion by 2029. The majority (80%) of these will be apartments, while villas and branded residences will make up 18% and 2%, respectively. This equates to an average of 60,576 new homes per year, outpacing the long-term completion rate of 36,000 homes annually.
Despite this supply, the availability of ultra-luxury homes priced above $10 million has plummeted by 40% in the past year. The number of properties in this bracket has dropped from 4,119 to 2,491, while homes priced above $25 million have seen an even sharper decline, from 583 to just 86 properties.
Durrani added, “This cycle is characterized by a rise in genuine end-users rather than speculative investors. Consequently, home listings across Dubai have declined by 30%, with prime market listings dropping by a notable 52%.”
Luxury Residential Market Sees Unprecedented Growth
Dubai’s prime residential real estate market—including areas such as Palm Jumeirah, Jumeirah Bay Island, Jumeirah Islands, and Emirates Hills—has also witnessed remarkable appreciation. In Q4 2024, transaction prices in these affluent neighborhoods averaged AED 6,627 per square foot, reflecting a 16.9% annual increase.
The luxury segment saw record-breaking sales, with 435 transactions surpassing the $10 million mark throughout 2024, 153 of which occurred in Q4 alone—the highest quarterly figure ever recorded for this category.
Petri Mannila, Partner at Knight Frank’s Prime Residential division, emphasized Dubai’s growing global reputation, stating, “Dubai’s luxury market has firmly established itself as a safe haven for high-net-worth individuals, experiencing another record-breaking year.”
Office Market Strengthens Amid Rising Demand
The commercial real estate sector in Dubai is also booming, with office rental rates increasing by an average of 9.1% in the second half of 2024. The Trade Center District led the surge, witnessing a staggering 96% rental growth. The demand for office space remains strong, driven by new business entrants and corporate expansions.
Knight Frank’s data revealed that office space demand reached 1.28 million square feet in 2024, marking a 64% rise from the previous year. The top contributors to this demand include business services, real estate, and banking and finance, which together accounted for 843,111 square feet of new space requirements.
Future Outlook: Alternative Business Hubs on the Rise
Prime office occupancy rates in key districts such as DIFC, Downtown Dubai, and Business Bay currently range between 95% and 99%, leading to substantial rent hikes. Business Bay, in particular, recorded an average rental increase of 46%.
As prime locations reach full capacity, companies are exploring alternative business districts such as Dubai Science Park and Expo City. These areas are gaining traction due to their state-of-the-art infrastructure and competitive rental prices.
Adam Wynne, Head of Commercial Agency at Knight Frank, commented, “With limited availability in central business districts, companies are shifting towards newer locations that offer modern facilities and better value. The trend of businesses relocating to emerging hubs is set to continue in the coming years.”
Dubai’s real estate market remains a beacon of growth, attracting investors and businesses from around the world. With record-breaking luxury home sales, a robust residential pipeline, and an increasingly competitive office market, the city’s property sector is poised for sustained expansion well into the future.
