• Off-plan transaction volumes saw a 51% y-o-y increase while secondary market transactions increased by 19% y-o-y
  • 22,900 units delivered YTD 2024, with 10,700 units anticipated in Q4 2024, bringing the yearly total to 33,600 units
  • Project launches in Q3 2024 saw some levels of moderation marking only a 4% y-o-y increase
  • The ultra-prime segment remains strong with a 41% y-o-y rise in number of transactions
  • City-wide office occupancy levels are now at 91% while Grade A office stock at a record high 94%
  • Sustained demand and very limited availability have resulted in a 19% y-o-y rise in city-wide office rents
  • Despite new office project announcements, the Dubai office market is expected to remain undersupplied until 2027

Dubai, UAE: Cushman & Wakefield Core’s Q3 2024 Market Update highlights that Dubai’s residential market has entered its fifth year of upward trajectory, with a 20% year-on-year increase in city-wide residential sales prices and an 18% rise in rental prices. The rise marks the 17th and 15th consecutive quarters of price and rent increases respectively, underscoring sustained demand.

RESIDENTIAL MARKET 

Supply for 2024 remains moderate but pipeline building up for upcoming years.

In Q3 2024, approximately 9,157 residential units were delivered, bringing the year-to-date total to 22,900 units. An additional 10,700 units are projected for Q4, positioning the 2024 annual total at around 33,600 units. While 2024’s supply remains moderate, the development pipeline is gaining momentum, with substantial handovers anticipated over the next 2-3 years. This increase in supply may contribute to market stabilization.

Off-plan market continues to dominate while the secondary market shows sustained signs of stabilization.

Off-plan transaction volumes in Q3 2024 surged by 51% compared to Q3 2023, while secondary market sales saw a year-on-year increase of 19%.

Prathyusha Gurrapu, Head of Research and Consultancy at Cushman & Wakefield Core says “In Q3 2024, off-plan transactions were around 34,000, a figure 2.3 times greater than that of secondary market transactions. This reflects a growing shift in Dubai’s residential market towards off-plan properties, primarily fuelled by the appeal of attractive payment plans and increasing demand for property-linked visas.

Emerging signs of price moderation, particularly in prime segments where growth is stabilizing.

City-wide sales prices recorded a robust 20% year-on-year increase. By market segment, villa sales prices saw a strong 23% rise year-on-year, while apartment prices followed closely with a 19% increase compared to the same period last year. While city-wide sales prices continue their upward trajectory, prime districts are experiencing a relative stabilisation in price growth and indicating signs of moderation in the upper end of the market. In contrast, mid-market communities are witnessing a sharp double-digit growth across both villa and apartment communities.

City-wide rents continue to rise, impacting affordability and pushing tenants to renew where possible.

City-wide rents have increased by 18% year-on-year, with apartment rents leading at a notable 19% rise, while villa rents saw a more moderate increase of 13%, indicating a trend towards stabilization in the villa segment as prices approach affordability thresholds. The rental market reflects similar dynamics observed in the sales market, where prime rental growth has moderated in areas like Palm Jumeirah and Dubai Marina, both experiencing single-digit increases. In contrast, districts such as Discovery Gardens, Dubai Sports City, Dubailand, and Jumeirah Village Circle recorded the highest rental growth, highlighting shifting demand towards more affordable and mid-market communities.

Furthermore, a notable trend is the continued increase in tenant renewals, which rose by 16% in Q3 2024. The new RERA

rental calculator has helped narrow the gap between new and renewed rental rates, however, new leases are still trading at an average premium of 14% over renewals.

Ultra-Prime Market: Over 424 residential properties were sold above AED 20 million in Dubai in Q3 2024, displaying a strong 41% increase over Q3 2023. Palm Jumeirah remains the location of choice accounting for the highest share of ultra-prime transactions.

Prathyusha adds “With growing UHNI demand for ultra-prime properties, particularly waterfront properties and branded residences, we foresee this segment to remain strong as global wealth continues to gravitate to Dubai.”

OFFICE MARKET

Robert Thomas, Head of Agency at Cushman & Wakefield Core says “Dubai’s office market remains immensely active, with city-wide occupancy reaching 91% and rents growing by 19% y-o-y. Grade A office spaces, with a 94% occupancy rate, are in particularly high demand, as businesses seek quality spaces despite rising costs.”

Despite several new recent office project launches in 2024, the Dubai office market is expected to remain under-supplied for the near term as most of these announcements are scheduled for 2027/2028 handover and are highly likely to be pre-leased by the time they are handed over. The market remains landlord-friendly, with many companies opting for long-term lease renewals amid rising rents.

Office Supply: In Q3 2024, Millenium Plaza Downtown (renovated Crowne Plaza) was handed over adding nearly 176,000 sq. ft. office stock. Over 1.54 million sq. ft. is expected to be handed over in the remainder of 2024 and 2025, mainly from Expo City Dubai, Innovation Hub in Dubai Internet City, office component in Wasl Tower on Sheikh Zayed Road and 2 office buildings in Dubai CommerCity.

Robert says “Central business districts such as Downtown Dubai, Sheikh Zayed Road (Trade Center to 1st Interchange), and DIFC continue to maintain exceptionally high occupancy levels, with all above 95% in Q3 2024. The high occupancy levels across these central areas reflect a competitive market environment continuing to exert significant upward pressure on rents.”

Office Rental Market Remains Strong Amid High Demand and Limited Supply

High occupancy rates have bolstered landlord confidence, leading to continued rental increases and premiums on limited office space. The demand for premium office space remains robust, with central business districts like DIFC, Downtown Dubai, and Sheikh Zayed Road seeing the sharpest rental increases.

Average city-wide office rents reached AED 165 per sq. ft., a 19% increase year-on-year, with DIFC leading at AED 425 per sq. ft., followed by One Central and Downtown Dubai at AED 365 and AED 340, respectively.

Tenant demand is strong across sectors, with particularly high interest in free zones as both new and established businesses aim to establish or expand in Dubai. The market’s landlord-favourable conditions present added pressure for companies, especially global occupiers, who face challenges from the need for rapid decision-making in the current environment. As firms prioritize flexibility, demand for co-working and flex spaces has surged, offering adaptive solutions in this highly competitive market.

As the supply shortage is expected to persist in the near term, we expect a sustained upward pressure on rents, record high occupancy levels and strong pre-leasing activity across the upcoming office stock.

-Ends-

For further information or media queries, please contact:
Prathyusha Gurrapu, Director - Head of Research & Consulting, prathyusha.gurrapu@cushwake.ae
Fiona Johnston, Associate Director – Marketing, fiona.johnston@cushwake.ae

About Cushman & Wakefield

Cushman & Wakefield (NYSE: CWK) is a leading global commercial real estate services firm for property owners and occupiers with approximately 52,000 employees in nearly 400 offices and 60 countries. In 2023, the firm reported revenue of $9.5 billion across its core services of property, facilities and project management, leasing, capital markets, and valuation and other services. It also receives numerous industry and business accolades for its award-winning culture and commitment to Diversity, Equity and Inclusion (DEI), sustainability and more. An independently owned and operated affiliate of Cushman & Wakefield, operating in the UAE since 2008. For additional information, visit www.cushwake.ae.