Dubai real estate: $37.8bn Q3 spend despite slight dip in sales of properties over $2.7m

Dubai’s real estate market continues to attract global interest, with combined residential and commercial sales reaching AED138.8bn ($37.8bn) in Q3.

Residential transactions surged by 40.8 per cent year-on-year, contributing AED115.6bn ($31.5bn), while the commercial market added AED23.2bn ($6.3bn) in sales, reflecting a 28 per cent increase in total transaction value compared to the same period in 2023.

Dubai’s thriving real estate market is buoyed by strong economic fundamentals, rising foreign investment, and the emirate’s appeal as a destination for high-net-worth individuals and businesses.

Dubai real estate sales in Q3
This momentum is set against a backdrop of the UAE’s projected economic growth of 3.9 per cent for 2024, accelerating to 6.2 per cent in 2025, driven by key sectors such as tourism, real estate, and international trade.

Dubai’s residential sector posted strong results in Q3, with total transaction volumes increasing by 40.8 per cent year-on-year, reaching AED115.6bn ($31.5bn).

Off-plan properties accounted for more than 65 per cent of total transactions, driven by the launch of new projects and growing investor interest.

In Q3 alone, more than 30,000 off-plan units were sold, marking a 62.5 per cent increase from the same period last year.

Communities like Jumeirah Village Circle, Dubai Hills Estate, and Business Bay led the way, while new developments in areas like Dubai Creek Harbour and Sobha Hartland II also attracted significant attention.

In the secondary market, transaction volumes rose by 12.8 per cent, reflecting the sustained demand for ready-to-move-in properties.

Key communities such as Jumeirah Village Circle, Dubai Marina, and Business Bay experienced strong apartment sales, while villa and townhouse sales surged in Emirates Living, Al Furjan, and Mohammed Bin Rashid City, despite price increases exceeding 15 per cent in many areas.

Despite a modest 6 per cent decline in transactions over AED10m ($2.7m) compared to Q3 2023, Dubai’s luxury real estate market remains on track for a record-breaking year.

The Palm Jumeirah, Dubai’s iconic high-end community, recorded 110 transactions over AED10m ($2.7m), including three exceeding AED200m ($54m).

Among these was the sale of a penthouse for AED275m ($75m), showcasing the sustained appetite for ultra-luxury properties.

Other established luxury communities like Mohammed Bin Rashid City and Dubai Hills Estate continued to see strong demand, while emerging areas such as The Oasis and Palm Jebel Ali highlighted the broadening appeal of Dubai’s luxury market, attracting high-net-worth individuals seeking exclusive properties in the city.

The commercial real estate sector posted impressive growth in Q3, with AED23.2bn ($6.3bn) in sales, a 28 per cent year-on-year increase in transaction value.

Office sales rose by 12.6 per cent, while retail transactions surged by 16.8 per cent, signalling strong demand for premium commercial properties.

Prime districts such as Business Bay and Jumeirah Lakes Towers (JLT) remained the top choices for office spaces, underscoring Dubai’s appeal as a global business hub.

Despite a slight 6.5 per cent decline in overall commercial sales volumes, the value of transactions has surged, driven by rising prices for high-quality assets.

Additionally, the leasing market witnessed upward trends in rents, with office and retail rents growing by 4 per cent and warehouse rents jumping by 19 per cent, reflecting strong demand in the industrial sector.

The leasing market across Dubai remains buoyant, supported by the city’s growing population. Communities like Jumeirah Village Circle, Dubai Silicon Oasis, and Dubai Marina lead rental transactions.

Despite the increasing number of tenants opting to buy or renew their contracts, rental prices continue to rise due to sustained demand, with many areas witnessing double-digit increases in average rents.

As the UAE economy is projected to grow by 3.9 per cent in 2024 and accelerate to 6.2 per cent in 2025, Dubai’s real estate market is well-positioned for continued expansion.

Government initiatives to diversify the economy, particularly in key sectors such as technology, healthcare, and green energy, are expected to further drive demand across both residential and commercial markets.

Source: Arabian Business