Dubai’s real estate market saw record-high rents and strong growth in Q4 2023, with villa rents reaching a decade-high average and apartments continuing an upward trend
The villa rental market in Dubai is expected to remain relatively stable during the first quarter of 2024, with rental rates remaining unchanged, according to Haider Tuaima, Director and Head of Real Estate Research at Valustrat.
However, apartment rents are likely to experience an upward trend during the same period, he added.
“Villa rents grew 81 percent since the pandemic, now averaging AED 398,700 per annum, the highest average in a decade; apartments stood at AED 82,000 per annum, growing 49 percent in three years, with more room for growth,” he said.
Rents across Dubai’s real estate sectors registered their strongest annual growth on record in Q4 2023, according to market analysts ValuStrat.
Residential rents grew by 12.8 percent over the past year, with apartments leading the way at 15.9 percent annual growth. Average apartment rents now range from AED 54,000 to AED 176,000. Villa rents rose 9.2 percent to between AED 310,000 to AED 492,000.
Offices saw rents explode higher by 58.4 percent over the past two years alone. Average office rents hit an all-time high of AED 1,454 per sqm, with top districts like DIFC commanding over AED 1,600/sqm.
Industrial/warehouse rents proved equally robust, rising anywhere from 14-38 percent depending on the locale. Facilities in Al Quoz now lease from AED 431-753/sqm.
These surging rents – significantly outpacing property value gains – underscore the intensity of demand versus limited supply, the report said, adding that population growth, business expansion, remote working trends and an economic recovery driving firms and residents to Dubai are cited as factors sustaining high occupancy and rental inflation.
Experts believe rents will remain on an upward trajectory through 2024 as new housing, offices and warehouses fail to keep pace with the emirate’s fast-growing population and thriving non-oil sectors.
Dubai’s real estate sector finished the year on a high note, the report said, with capital values, rents and transaction volumes across all major asset classes reaching new peaks in the fourth quarter of 2023.
Residential prices recorded their strongest annual growth in a decade, up 19.9 percent over the year according to ValuStrat’s Price Index (VPI). Apartment values surged 15.4 percent while villas led gains with a 24.9 percent increase. Popular mid-tier communities like Discovery Gardens and Dubai Silicon Oasis saw some of the fastest price rises.
Prime property continued its bullish trajectory, with valuations in high-end areas jumping 20.9 percent in the year. Ready home sales hit an all-time high of over 12,000 transactions in Q4.
Offices also had a standout quarter. Capital values and transaction volumes set new records, up 32.1 percent and 21.9 percent year-on-year respectively.
The hospitality sector also gained momentum, with hotel occupancy improving 6 percent to 77.2 percent and international visitor arrivals surging 20 percent to over 15 million people.
The positive momentum is expected to carry into 2024 on the back of government initiatives, population growth and an ongoing economic recovery, the report said.
