The real estate market in Dubai has been booming with a 10 percent increase in rents in the first half of the year, and another similar jump expected in the second half of the year. This increase in rents can be attributed to the rise in population, influx of high-net-worth individuals, and the expanding economy creating new job opportunities in the market. Industry executives are projecting a continued supply of properties and a steady growth of 5-10 percent over the next six months.
Paul Kelly, operations director at Allsopp and Allsopp, anticipates that the second half of 2024 and 2025 will see a shift towards more steady and gradual rental growth. With over 10,000 units expected to enter the market in the second quarter alone, the increase in supply will be crucial to match the expected rise in population. The city has seen over 30,000 new residents in the first five months of 2024, with over 6,700 millionaires expected to enter the city, further fueling the growth of the real estate market.
During the first half of 2024, average rents across Dubai increased by 15.7 percent compared to the same period in 2023. Apartments and townhouses experienced an average increase of just below 15 percent, while villas saw an average increase of 18 percent. The introduction of the updated Rera Index in March may have contributed to bringing previously undervalued units closer to the market average, thus leading to an overall increase in rental prices.
In the first half of 2024, areas such as Jumeirah Beach Residence (JBR), Town Square, Dubai Production City, Dubai Healthcare City 2, and Meydan witnessed a 21 to 22 percent increase in rentals. Dubai South’s average rents also rose by approximately 38 percent compared to the first half of last year. Luxury communities like Jumeirah Islands and Al Barari saw significant increases in average rental prices, with Jumeirah Islands experiencing a 43 percent increase and Al Barari seeing a 39 percent increase in average rents.
Some of the strongest performers in the first half of 2024 were Tilal Al Ghaf, Dubai Hills Estate, The Villa Project, and Dubai Creek Harbour, all experiencing an increase of over 10 percent in average rental price per square foot. With more supply coming into the market and landlords offering flexible payment options, tenants may be able to keep pace with the rising market and meet the expected rising demand. Overall, the real estate market in Dubai is poised for continued growth and strong performance in the coming months.
