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Dubai real estate Q1 2024: Top areas to buy and rent revealed

Investors seeking luxury properties in Dubai have focused on Dubai Marina, Business Bay, Arabian Ranches, and Dubai Hills Estate. Dubai Marina and Business Bay are popular for apartment rentals, while Dubai Hills Estate and Al Barsha are preferred for high-end villa rentals

Dubai property market soars in 2024: Villas lead record-breaking price surge

In Q1 2024, Dubai’s real estate market experienced strong interest from investors and end-users, as well as an influx of new properties. This ensured an adequate supply to meet the demand for housing in the Emirate. During this period, there were 36,946 property sale transactions valued at $29.85 billion (AED 109.6 billion) in Dubai.

Where have end-users parked their money?

In the first quarter of 2024, sales prices for apartments and villas in Dubai have seen a modest increase, with some areas experiencing surges of up to 7%. Affordable properties in International City, Dubai South, DAMAC Hills 2, and Dubailand have attracted increased interest from investors and homebuyers, while those with mid-range budgets have shown a preference for Jumeirah Village Circle, Jumeirah Lake Towers, Al Furjan, and The Springs. Luxury property investors have focused on Dubai Marina, Business Bay, Arabian Ranches, and Dubai Hills Estate during this period.

In the affordable housing market, apartment prices in popular areas have generally decreased by 1% to 16%, except for Dubai South, which saw a small increase of 4.48%. Conversely, affordable villa prices have mostly increased by 7% to 62%, with Dubailand experiencing the biggest jump in transaction prices.

The average sales transaction prices for mid-tier apartments have seen a significant increase, ranging from 6% to 42%, with Jumeirah Lake Towers showing the most notable uptick. Similarly, sought-after areas with mid-tier villas also experienced increases in average transaction sales prices, ranging from 5% to 14%. However, Al Furjan stood out as an exception, with a slight decrease of 0.37% in its transactional sale price.

In the luxury property segment, the majority of areas witnessed a steady appreciation in transactional prices ranging from 2% to 23%.

Certain areas in Dubai, including DIP, Discovery Gardens, and Liwan, are prime options for investors looking to achieve high returns on investment from apartment rentals, with yields reaching up to 11%. In the mid-tier segment, Dubai Sports City, Dubai Silicon Oasis, and Motor City are also popular choices, offering rental yields of up to 10%. Luxury apartment sectors like Green Community, Al Sufouh, and DAMAC Hills are showcasing strong attractiveness with returns exceeding 8%, surpassing many global market benchmarks.

Bayut’s analysis of villa communities reveals promising outlooks for potential investors. International City, DAMAC Hills 2, and The Valley offer average ROIs exceeding 6%, making them attractive options for buy-to-let investors. Mid-tier villas in Jumeirah Village Triangle, JVC, and Mudon have projected ROIs ranging between 6% and 8%. The luxury villa segment is highlighted by The Sustainable City, with an ROI exceeding 7% due to its distinctive features and limited market supply. Family-centric communities like Al Barari and Tilal Al Ghaf also present robust ROIs exceeding 6%.

The state of the rental market in Dubai

According to Bayut’s data analysis, rental prices have increased in sought-after areas across different segments. Affordable apartments have seen rent hikes of 1% to 17%, while mid-tier apartments have experienced increases of up to 12%. On the other hand, luxury apartments have seen a decline of up to 4%.

Reasonably-priced villas saw a decline in price by up to 3%, while rental houses in Mirdif have seen an increase of 1% to 7%. Mid-tier villa rentals have gone up by 2% to 17%, with certain bed types in JVC and Town Square experiencing minor price decreases. Luxury villa rentals have surged by 13%, but 4-bedroom homes in Al Barsha and DAMAC Hills have become more affordable by 12% to 14%.

Among those seeking affordable accommodations, Deira and Al Nahda have emerged as popular choices for apartments, while DAMAC Hills 2 and Mirdif have garnered attention for villas. In the mid-tier segment, Jumeirah Village Circle (JVC) and Bur Dubai apartments have been in high demand among tenants, whereas properties in JVC and Arabian Ranches 3 have attracted villa-seekers. In the luxury category, Dubai Marina and Business Bay have remained sought-after destinations for apartment rentals, while Dubai Hills Estate and Al Barsha have been favoured for high-end villa rentals.

Rental prices in affordable neighbourhoods for villas and apartments have increased by 1% to 5%, while mid-tier segment rentals have seen up to a 12% increase. Luxury segment rentals have also seen a 5% increase, except for luxury villa rentals in DAMAC Hills which have decreased by 7.24%.

Commenting on the findings, Haider Ali Khan, CEO of Bayut and Head of Dubizzle Group MENA, mentions, “Dubai’s real estate market remains promising despite ongoing global uncertainties, with prevailing market trends, investment opportunities and growth strategies instilling confidence in stakeholders navigating its dynamic landscape. The emergence of new master communities and innovative approaches to off-plan developments underscore Dubai’s resilience and appeal as a real estate hub. As we confront the challenges and opportunities ahead, fostering collaboration and strategic planning will be pivotal in maximising returns and creating sustainable growth in Dubai’s real estate sector.”