Dubai property prices: Demand drives prices up

What are the current Dubai property prices in the top segment?

Exclusive living in Dubai is popular: the market for high-quality real estate in the luxury segment is currently experiencing astonishing growth. The number of transactions for properties with a value of more than 2.4 million euros (10 million UAE dirhams) has risen sharply. In 2021, there were 1,720 transactions of this type, rising to 2,909 in 2022, and 5,192 in 2023. 

While the sale of properties worth more than 2.4 million euros used to be reserved for Dubai’s most exclusive properties, this price range is increasingly becoming the norm for villas, apartments, and penthouses in both the mid- and high-end market segments.

How are Dubai property prices currently developing, especially for high-quality properties?

Average real estate prices in Dubai have risen steadily since 2021, making living in Dubai increasingly exclusive. The market has seen 41 consecutive months of year-on-year price growth, with prices rising by 17 percent between August 2023 and August 2024 alone. 

The price increase was particularly pronounced in established, first-class villa districts, where high demand and limited supply have driven up Dubai property prices considerably. 

For example, since 2021, the change in average villa prices in some of Dubai's most popular luxury districts has been:

• On the iconic man-made island, Palm Jumeirah: +60 percent

• In the family-friendly Arabian Ranches: +82 percent

• In the exclusive Jumeirah Islands: +151 percent

Living in Dubai: what are the top-five most exclusive residential areas?

Palm Jumeirah

Palm Jumeirah is home to the most luxurious properties in Dubai. “The Palm,” as it is also known, is the world’s largest man-made island in the shape of a palm tree. It is a resort-like residential development with themed hotels, luxury villas, marinas, and a wide range of shopping options, offering a unique experience. Palm Jumeirah regularly ranks number one for property sales over 2.4 million euros (10 million UAE dirhams). Dubai property prices for beachfront villas on the iconic Palm Jumeirah average 9 million euros (37 million UAE dirhams).

Dubai Marina

The beating heart of Dubai – this is where you will find first-class restaurants and trendy nightlife venues. Built in recent years, Dubai Marina is a modern district centered around an artificial canal and marina. Chic cafés and pop-up markets line the waterfront promenade known as Dubai Marina Walk, while Dubai Marina Mall is full of luxury brand boutiques. Living in Dubai is particularly appealing here: the area attracts young businesspeople, couples, and families who want to live in a dynamic environment with easy access to both the beach and the city’s main business centers. Many buyers are looking for the magnificent view of the marina.

Downtown Dubai

The area surrounding the iconic landmark Burj Khalifa – the tallest tower in the world – has become the city’s center of attraction. Downtown Dubai is the true heart of the emirate and offers the ultimate metropolitan experience with plenty of entertainment and glamor. The world’s largest shopping mall, the Dubai Mall, as well as the Dubai Opera, and the Dubai Fountain make this district a year-round hotspot. Downtown Dubai and the neighboring Business Bay, which offer a cosmopolitan lifestyle and luxurious apartments in the heart of the city, are highly sought after by wealthy businesspeople and affluent individuals. 

Dubai Hills Estate

Dubai Hills offers a perfect blend of lush green spaces and luxurious living and is the first choice for families and professionals seeking a tranquil suburban atmosphere. A unique combination of nature and urban elegance defines Dubai living here. The residential area offers a wide range of properties to suit different lifestyle needs – from spacious villas to stylish townhouses and contemporary apartments. Dubai Hills is known for its 18-hole golf course and extensive parks, a rare find in Dubai. 

Emirates Living

Those looking for an established residential area in a peaceful, family-friendly environment will feel right at home in Emirates Living. The residential community comprises several neighborhoods such as The Springs, The Lakes, The Meadows, and the exceptionally luxurious Emirates Hills, offering a range of exclusive townhouses and villas. Emirates Living is particularly popular with expat families and is valued for its green spaces, lakes, and proximity to the best schools. The perfect choice for those looking to combine tranquil Dubai living with well-connected suburban living.

Is it possible to find an attractive property in Dubai on a smaller budget?

In the up-and-coming residential areas on the outskirts of Dubai, such as Dubai South, The Valley, and Damac Hills 2, modern two- and three-bedroom townhouses can be found for less than 500,000 euros (2 million UAE dirhams). These lower Dubai property prices reflect the inland location and greater distance to central business centers. However, these areas are developing rapidly and offer a variety of attractive residential opportunities.

Properties for less than 500,000 euros can also be found in popular harbor districts such as Dubai Marina and Jumeirah Beach Residence. These tend to be smaller apartments, often older properties that may require some modernization. They are ideal for those who want to remodel their property to their own taste and for those who value proximity to shopping, restaurants, and a diverse range of leisure activities.

While affordable villas and townhouses are limited, Dubai has a wide selection of one-, two-, and three-bedroom apartments for under 500,000 euros. Real estate prices in Dubai are slightly more moderate in less exclusive neighborhoods. Excluding the high-end areas, there are a few areas that qualify here, such as Jumeirah Village Circle, Town Square, Al Furjan, and Meydan. These areas may not offer the luxurious lifestyle that the metropolis is known for, but they do offer comfortable living in Dubai with good transport links.

Daniel Hadi, CEO of Engel & Völkers Market Center Dubai, gives an outlook on the future development of Dubai property prices

Mr. Hadi, what advice would you give to potential buyers who are currently looking for a second home in Dubai?

“There are many reasons to buy a second home in Dubai: the geographical location and the unique lifestyle make the metropolis a global magnet. Rental yields are higher here than in many other cities around the world. Buyers can obtain a residence visa for five or ten years when purchasing a property for more than 2 million UAE dirhams (approx. 500,000 euros). There are also mortgages for nonresidents when buying an existing property and flexible, interest-free payment plans for new-build properties. 

For prospective buyers looking to purchase a second home in Dubai, my main advice is to work closely with experienced real estate experts who know the local market and Dubai real estate prices inside out. The property market in Dubai is very diverse – and an expert with a high level of expertise can help you realize your real estate dream strategically. 

You should also weigh up the advantages and disadvantages of new-build properties compared to existing properties. New-build properties can offer lower entry prices and potential for higher value appreciation, but they are associated with longer waiting times. You can live in an existing property immediately or rent it out directly.

My final tip is to focus on areas of the city that are in high demand. Areas such as Dubai Marina, Downtown Dubai, and Palm Jumeirah continue to attract strong interest from buyers and tenants, offering great potential for high rental yields and future value appreciation.”

What current trends are affecting the real estate market in Dubai?

Trend 1: Clear shift from renting to buying 

Rental prices have risen continuously since 2021, with average rents increasing by around 20 percent in 2023 alone. As a result, more and more people are opting to purchase their own home. The increase in demand is also being fueled by Dubai’s growing reputation as a popular destination for long-term living. If the expected interest rate cuts materialize at the end of 2024 and into 2025, this trend is likely to intensify even further.

Trend 2: New construction boom as the strongest growth driver

The new-build property segment is the main driver of market growth and accounted for 64 percent of all real estate transactions in the first half of 2024. This high share is due to the limited supply of existing properties, attractive payment plans from developers, low upfront costs, and the expectation of high value appreciation. Dubai’s ongoing development of high-quality new-build projects continues to attract both local and international buyers.

Trend 3: Off to new horizons

As the established residential areas offer a limited supply of real estate, much of the market growth has shifted to new residential communities on the outskirts of Dubai. Here, Dubai property prices are still moderate, while these neighborhoods offer excellent infrastructure and a variety of real estate options. Examples of this are The Valley, Damac Hills 2, and Dubai South – the latter is currently the largest planned urban district in Dubai, offering space for up to one million residents and the future home of the world’s largest airport.

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The “Engel & Völkers Market Insights” are an exclusive series of blog articles that give you a detailed insight into the most important real estate markets worldwide. Engel & Völkers has valuable market knowledge in more than 1,000 locations. Whether urban, island, or popular coastal regions – we provide you with relevant facts and data to help you decide whether to buy or sell your property!