According to the most recent data from the ValuStrat Price Index (VPI), the residential and commercial real estate markets in Dubai experienced notable growth during the first quarter of 2024.
The ValuStrat Price Index, also known as the VPI, is a valuation-based price index designed to show how capital values and rental values of typical residential and commercial properties fluctuate over time.
The VPI for capital values in the residential segment increased by 6.4% every quarter and by 24.7% annually, reaching 167.5 points from the base of 100 points in Q1 2021. Mid-affordable communities were the primary driver of this growth, with apartment valuations rising 5.7% quarterly and 20.1% annually.
Apartment valuations continued their upward trajectory, rising 5.7% every quarter and 20.1% from the same period in the previous year. This was primarily due to communities in the mid-affordable range, which propelled the VPI to yet another record expansion of 139.2 points. The Greens (29.8%), Town Square (24.5%), Al Quoz Fourth (24.1%), Palm Jumeirah (29%), The Views (24.8%), Discovery Gardens (32.6%), and Dubai Production City (23.9%) were the top five performers annually.
With a yearly gain of 29.6% and 211 points, villas demonstrated their resilience and reached a 10-year high in prime villa values. In addition, the office sector experienced an incredible upswing, as evidenced by office unit valuations rising by 29.9% annually, indicating a persistent demand for high-end office spaces. Villa values increased 7.7% every quarter in Q1 2024. Jumeirah Islands (32.2 percent), Palm Jumeirah (31.9 percent), Dubai Hills Estate (30.6 percent), and Mudon (27.2 percent) had the best yearly results.
“The latest data from the ValuStrat Price Index highlights the strength and dynamism of Dubai’s real estate market. With steady growth across residential, office, and industrial sectors, Dubai continues to attract investors and businesses, positioning itself as a premier destination for real estate investment in the region,” Haider Tuaima, director and head of real estate research at ValuStrat, said.
Dubai’s prime property prices increased by 26.7%. year over year and 7.3% quarter over quarter, establishing a new high of 173 points. As of Q1 2021, this is compared to 100 base points. Desirable prime villas saw capital gains of 33.1% and a new 10-year high of 211.8 points. quarter over quarter and 8.5% year over year. Villas are still falling short of luxury apartments, as capital gains jumped 21.6 percent yearly and 6.2 percent from the previous quarter to reach 149.4 index points, new highs for premium apartments.
Asking prices for residential properties increased 3.0% from the previous quarter and 11.7% from the same time last year. The asking rent for apartments increased by 16.4%. year over year and 4.4% from quarter to quarter, averaging Dh85,800. Villa rentals increased by 1.3% every quarter and 6.1% on an annual basis, with an average rent of Dh403,800. In Dubai, the percentage of homes occupied was estimated to be 87.7% in the first quarter.
A total of 46,558 new build units are anticipated to hit the market this year. 5,770 apartments and 1,038 villas were estimated to have been completed overall as of the first quarter of 2024, which is 15% of the initial estimates for the entire project. According to the report, a total of 21,230 villas and 85,999 apartments are presently being built, with completion scheduled for 2028.
Off-plan home ticket sizes increased 5.3% yearly on average to Dh2.7 million. The average transacted price for off-plan properties in the city was Dh1,856 per square foot, or Dh19,978 per square meter. Registrations for off-plan Oqood (contract) increased by 20.3%. year over year and 63.1% quarter over quarter, or Dh55.3 billion in investments.
Office unit valuations in Dubai increased by 29.9% annually and 4.3% quarterly, for the 12th consecutive quarter of growth. This indicates the ongoing demand for premium office space in the city’s well-connected locations. Nearly twice as much as the 100-point base set in Q1 2021, the ValuStrat Price Index covering Dubai’s office capital values reached a record 194.2 points. Office space was priced at a weighted average of Dh15,952 per square meter, or Dh1,482 per square foot. Five major central business districts in Dubai—the DIFC (38.7%), Jumeirah Lake Towers (36.1%), Business Bay (33.3%), and Barsha Heights (24.2%)—saw continuous double-digit annual growth.
