Dubai real estate: Biggest price rises revealed as neighbourhood sees 33% increase and one area sees 10% rent returns

A Dubai real estate report has identified the neighbourhoods with the largest price and rent increases, the fastest growing areas and which districts have the best rental returns for investors.

Dubai’s residential property market soared to new heights in 2024, with a record-breaking 169,000 sales – an increase of 42 per cent on 2023, according to Cavendish Maxwell.

Prices saw sustained increases during the year, ending 0.9 per cent up month-on-month in December, and 3.1 per cent higher than the previous quarter.

Dubai real estate investment returns

Year-on-year, prices rose 16.5 per cent, with the cost per square foot reaching AED1,493 ($407) in December – an increase of more than 90 per cent on the April 2009 low, according to Cavendish Maxwell’s 2024 Dubai Residential Market Performance report.

Dubai’s residential property sector closed 2024 with 47 months of continuous price rises.

However, as anticipated by Cavendish Maxwell, the rate of appreciation is starting to slow, with monthly growth now hovering around 1 per cent, compared to previous month-on-month increases of up to 2.5 per cent.

Mortgage activity also soared in 2024, hitting an all-time high of 36,600 loans – up almost a third on 2023.

The booming off-plan sector continued to dominate the market, with sales four times up on pre-Covid levels.

Almost 145,000 new off-plan units came to the market during the year, an average of 400 per day, the report shows.

Emaar Properties, Binghatti Properties and DAMAC Properties led the new launch market in terms of both units released and sales value. 

In 2024, under construction projects represented 68 per cent of the total residential market.

Ronan Arthur, MRICS, Partner and Head of Residential Valuation at Cavendish Maxwell, said: “These impressive figures are not just the result of the recovery from the pandemic. They reflect a strong, stable property market that has seen consistent growth since 2022, driven by continued international demand from India, China and other Middle Eastern countries in particular.

“While Dubai’s residential market remains extremely robust, with further growth expected in 2025, there are now signs of an adjustment to more sustainable levels.

“As with previous market cycles, the emirate’s regulators, developers and investors are taking the right steps to avoid runaway growth which, as we have seen before, could threaten market stability.”

Apartments accounted for 81 per cent of residential property purchases in 2024, an increase of 3 per cent on the previous year.

Townhouses took 13 per cent of the share, a 1 per cent drop, and villas 6 per cent, a decrease of 2 per cent on 2023. 

Mohammed Bin Rashid City saw the highest number of units delivered in 2024, with 5,300 new homes, followed by Jumeirah Village Circle (circa 4,800), Business Bay (2,800), Al Furjan (2,600) and Rukan, Dubailand (1,500), according to the Cavendish Maxwell study.

The future supply table is topped by Jumeirah Village Circle, where almost 25,000 units are set to be delivered between now and 2027, followed by Business Bay (16,000), Azizi Venice (13,500), DAMAC Lagoons (11,100) and Arjan (9,000).

Jumeirah Village Circle also claimed the number one spot for apartment sales – for both title deed and off plan transactions, at 4,048 and 11,917 respectively.

In second place for title deed transactions was Business Bay (3,400), followed by Dubai Marina (2,963), Downtown Dubai (2,289) and International City (1,927).

In the off-plan sector, Business Bay saw 6,779 transactions, followed by Dubai Hills (5,487), Mohammed Bin Rashed City (4,156) and Sobha Hartland II (3,957).

DAMAC Hills 2 was the leading location for title deed villa and townhouse transactions, at 3,559 – almost twice as many as the second highest, DAMAC Lagoons, which saw 1,372 transactions.

The Acres commanded 896 sales, followed by Emirates Living (802) and Al Furjan (729).

Top of the off-plan charts was The Valley, with 2,850 sales, followed by Emaar South (1,721), DAMAC Riverside (1,620), Haven (743) and Reportage Village (663).

Apartment prices rose in most areas across Dubai last year, with Barsha Heights commanding the biggest increase: 33 per cent higher in Q4 2024 than in the same period in 2023.  

Next was Dubai Silicon Oasis at 24 per cent, followed by Jumeirah Lakes Towers at 21 per cent.

Prices dipped in Dubai Production City, with a 6 per cent drop, Bluewaters Island (4 per cent) and Mohammed Bin Rashid City (2 per cent).

Costs of villas and townhouses increased in all areas studied, with the highest rise at Nad Al Sheba, where home prices were up 54 per cent in Q4 2024 compared to Q4 2023.

In second place was Jumeirah Village Triangle (33 per cent), followed by Dubai South (29 per cent).

Gross rental yields remained robust across Dubai throughout 2024, underscoring the city’s position as a key destination for investors seeking strong returns.

At year end, average yields were 7.4 per cent for apartments and 5.1 per cent for villas and townhouses

Topping the rental return charts at the end of the year were Dubai Investments Park (10.3 per cent), International City (9.4 per cent) and Dubai Production City and Downtown Jebel Ali (both 8.6 per cent).

Cavendish Maxwell’s research shows that two cheques is the most popular rent payment plan, applicable to almost 40 per cent of tenants.

Just over 35 per cent pay in one cheque and 18.5 per cent make four payments. Landlords generally prefer one or two lump sums, which in some instances can result in discounted rent for tenants.

Average rents were up in most Dubai residential areas during 2024, but the rate of increases varied widely.

For apartments, the biggest hikes were in Dubai South, where rents were 30 per cent up on the previous year, followed by Al Furjan (27 per cent) and Dubai Production City (24 per cent).

There were much smaller increases at Palm Jumeirah (5 per cent), Al Habtoor City (3 per cent) and Bluewaters Island (1 per cent).

While Palm Jumeirah’s apartment rental prices saw a nominal increase, it was a different story for villas, where rates were up 52 per cent on 2023.

The second highest rise for villas and townhouses was at Al Furjan (39 per cent) with Dubai Investments Park at 38 per cent.

Dubai’s residential property sector has 243,000 units in the pipeline from now until the end of 2027, with apartments accounting for 80 per cent of the future inventory.

Areas with the largest upcoming supply, with 2,000+ units on the way, include:

• Palm Jumeirah
• Dubai Hills
• Dubai Marina
• Jumeirah Village Circle
• Jumeirah Village Triangle
• Al Furjan
• Dubai Silicon Oasis
• Town Square
• Studio City

This article is originally published in Arabian Business.