The number of homes available for sale in the $10 million+ bracket fell 40 percent, down to only 2,491 homes over the last 12 months
Dubai’s real estate market experienced significant growth in 2024, with residential property prices increasing by 19.1 percent over the past year to reach AED1,685 per square foot, as per the latest findings from global real estate consultancy Knight Frank. This surge positions average property values 13.3 percent higher than their peak levels in 2014.
Villa prices have also seen a substantial rise of 20.2 percent over the last 12 months, now standing at AED2,009 per square foot—an impressive 38.1 percent above the 2014 peak. This growth highlights the increasing demand for standalone villas, waterfront homes, and branded residences across Dubai.
“The upward momentum in residential property values continues, with demand showing no signs of slowing, driven by both local and international investors,” said Faisal Durrani, Partner and Head of Research, MENA at Knight Frank.
Residential Market Pipeline at 302,880 Units The report further outlined that Dubai’s real estate sector currently has 302,880 residential units under construction, scheduled for completion by 2029. Of these, apartments account for 80 percent, while villas make up 18 percent and branded residences comprise the remaining 2 percent. This equates to an estimated 60,576 homes being delivered annually over the next five years, surpassing the historical completion rate of around 36,000 homes per year.
Despite this supply influx, the availability of ultra-luxury properties has seen a sharp decline. The number of homes priced at $10 million or more dropped by 40 percent, from 4,119 to 2,491 units over the past year. Properties in the $25 million+ segment witnessed an even steeper decline, falling from 583 to just 86 homes within the same period.
“Unlike previous market cycles driven by speculative investments, this phase has seen an increase in genuine end-users. This shift is evident in the 30 percent reduction in overall listings across Dubai, with high-end market listings shrinking by a notable 52 percent. The demand for luxury villas remains exceptionally strong, with their values rising 20.2 percent last year—representing an astonishing 99.8 percent increase from Q1 2020 price levels,” added Durrani.
Luxury Residential Market Sees 16.9 Percent Growth Dubai’s high-end residential market, encompassing prime locations such as the Palm Jumeirah, Jumeirah Bay Island, Jumeirah Islands, and Emirates Hills, has recorded robust growth. In Q4 2024, transaction prices in these prestigious areas climbed to AED6,627 per square foot, reflecting a 16.9 percent year-over-year increase.
“Dubai’s luxury real estate sector continues to attract both domestic and international investors, cementing its reputation as a premier destination for high-net-worth individuals. The $10 million+ property market recorded an all-time high of 435 transactions in 2024, with 153 of those taking place in Q4 alone—the highest quarterly sales volume ever recorded in this segment,” said Petri Mannila, Partner – Prime Residential, Dubai.
Office Rents Surge by 9.1 Percent in H2 2024 The commercial real estate sector has also seen notable expansion, with average office lease rates in key areas rising by 9.1 percent in H2 2024. The Trade Center District led this growth with an astounding 96 percent increase in rental values.
“Dubai’s office space remains in high demand, driven by new business entrants and expanding enterprises. This sustained demand has resulted in an acute shortage of prime office spaces across the city,” Durrani noted.
Knight Frank reported that 1.28 million square feet of new office space was leased in 2024, marking a 64 percent rise from 2023. The sectors contributing most to this demand were business services, real estate, and banking & finance, collectively accounting for 843,111 square feet of new office leases.
Projections indicate that Dubai’s prime office supply will expand by approximately 8.2 million square feet between 2025 and 2028—an 86 percent increase compared to the 4.4 million square feet delivered between 2021 and 2024.
New Business Hubs Gain Popularity as Demand Rises With occupancy rates in key business districts such as DIFC, Downtown Dubai, and Business Bay ranging between 95 and 99 percent, rental prices have surged. In Business Bay alone, rents have soared by an average of 46 percent due to the high demand.
As a result, businesses are turning to emerging locations for expansion. Areas such as Dubai Science Park and Expo City are seeing growing interest, thanks to their modern infrastructure and competitive rental rates.
“Tenants are increasingly prioritizing quality office spaces, prompting businesses to seek locations beyond central Dubai. The shortage of prime office space is encouraging companies to explore newer business hubs, and locations such as Dubai Science Park and Expo City are gaining traction due to their cutting-edge facilities and attractive leasing options,” commented Adam Wynne, Partner and Head of Commercial Agency, Dubai.
