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Buy or Rent Apartments in Dubai? Comparison between rental prices versus sale prices by neighbourhood
Dubai apartment prices have risen by 17% in the last year, and rents have increased by over 20%. Is now the time to buy?
Ayman Hbeichi
July 21, 2024
Dubai's real estate market sees unprecedented growth in 2024
Dubai's real estate market is witnessing unprecedented growth, with significant increases in both sales and rental prices. In the first half of 2024, residential property sales soared to AED191bn ($52.5bn), a 38% rise from the previous year. This surge is driven by substantial demand in key communities and rapid absorption of new supply, particularly in high-demand areas like Downtown Dubai. With the market evolving dynamically, this article delves into the latest trends, price changes, and future prospects, providing crucial insights for investors and potential re-locators from Western countries.
Record Real Estate Sales:
Dubai's residential property sales hit a record AED191bn ($52.5bn) in the first half of 2024, marking a 38% increase from H1 2023. This surge highlights the market's robust activity and investor confidence.
Significant Price Increases:
Average apartment prices rose by 17% across 10 key communities. JVC (+30%), JLT (+28%), and JBR (+24%) saw the highest increases, indicating high demand and value appreciation in these areas.
Rental Market Growth:
Average rental prices increased by 22% compared to H1 2023, with Bluewaters Island experiencing a staggering 79% rise. This reflects strong rental demand and the attractiveness of these locations.
Apartment Sales Price Increases
* AED $1M ~ $373K CAD | $272K USD *
Neighbourhood | H1 2023 | H1 2024 | Change |
|---|---|---|---|
JVC | AED 671,089 | AED 875,162 | 30% |
JLT | AED 1,198,064 | AED 1,530,326 | 28% |
JBR | AED 2,944,926 | AED 3,658,216 | 24% |
Downtown Dubai | AED 2,699,799 | AED 3,285,700 | 22% |
Dubai Marina | AED 1,993,114 | AED 2,338,757 | 17% |
Views & Greens | AED 1,513,300 | AED 1,731,146 | 14% |
City Walk | AED 3,700,773 | AED 4,199,233 | 13% |
Bluewaters Island | AED 9,214,960 | AED 10,436,325 | 13% |
Emaar Beachfront | AED 4,113,883 | AED 4,401,787 | 7% |
Palm Jumeirah | AED 5,309,473 | AED 5,573,491 | 5% |
Apartment Rental Price Increases
* Prices are annual
Neighbourhood | H1 2023 | H1 2024 | Change |
|---|---|---|---|
Bluewaters Island | AED 250,702 | AED 447,930 | 79% |
Palm Jumeirah | AED 180,387 | AED 224,481 | 24% |
JBR | AED 125,089 | AED 148,310 | 19% |
Downtown Dubai | AED 132,411 | AED 156,273 | 18% |
Emaar Beachfront | AED 200,347 | AED 237,083 | 18% |
JVC | AED 53,270 | AED 62,176 | 17% |
Greens | AED 83,041 | AED 95,480 | 15% |
Dubai Marina | AED 106,381 | AED 122,513 | 15% |
JLT | AED 76,435 | AED 87,205 | 14% |
Views | AED 105,790 | AED 119,067 | 13% |
City Walk | AED 183,766 | AED 195,879 | 7% |
Key Insights
New Residents' Trend:
Newcomers typically rent for 1-2 years before purchasing property. This trend helps absorb new supply, especially in high-demand areas like Downtown Dubai, which saw over 550 new rental contracts in the first half of 2024 alone.
Market Absorption:
The rapid absorption of new residential buildings, particularly in Downtown Dubai, underscores the high demand and efficient market dynamics in accommodating new supply.
Future Rental Supply:
A significant increase in rental supply is expected in 2025-2026, predominantly in apartments. This will cater to diverse market segments, including residents, second home buyers, and investors targeting the growing tourist market.
Three Demand Pools:
Residential supply needs to appeal to three growing demand pools: population growth (residents), exclusive use second home/holiday home buyers, and investors targeting the rising tourist market through managed holiday home investments.
These insights demonstrate Dubai's evolving real estate landscape, highlighting opportunities for investors and relocators to benefit from the city's dynamic market conditions and strategic growth initiatives. Keep in mind that, as investors, we don’t expect or want the market to continue to deliver these types of increases and rapid growths month over month. We expect the market to stabilize and deliver continued, sustainable growth and strong returns YoY that are in line with the long term economic plans of Dubai.