Engel & Völkers Middle East, known for its residential and commercial real estate services in the premium segment, has released its latest market report for June, highlighting the ongoing resilience and growth of Dubai’s real estate market.
Despite a pullback from May’s record-breaking performance, June 2024 saw a substantial increase in residential transactions, while the commercial market demonstrated strong underlying strength and resilience.
“Our June report underscores the dynamic and resilient nature of Dubai’s real estate market; the ongoing growth in both residential and commercial sectors reflects the city’s strong economic fundamentals and its attractiveness to global investors. We remain optimistic about the market’s potential and look forward to continued success in the coming months,” said Daniel Hadi, CEO at Engel & Völkers Middle East.
Residential market overview
In June, Dubai’s real estate market witnessed 13,436 sales transactions, marking a significant 43.4% increase year on year. This robust growth was largely driven by the primary market, where transactions surged by 61.2%. The secondary market also showed strong performance, with a 23.8% rise in transactions, reflecting broad-based market expansion.
Apartments remained the top choice for many buyers, with one-bedroom units accounting for over 30% of transactions.
Notably, more than 50% of sales were priced between Dhs750K and Dhs1.5M, underscoring the market’s accessibility and wide appeal.
Average prices continued to climb in key communities, indicating sustained demand. Despite the traditionally quieter summer months approaching, early signs suggest that this year’s slowdown might be less pronounced, particularly in the primary market.
Top five areas in Dubai
The top five communities by sales transactions were Arabian Ranches, Business Bay, Damac Hills, Downtown Dubai, and Dubai Hills Estate.
Commercial market insights
On the commercial front, June recorded a 15% year-on-year decline in sales transactions. However, this apparent dip was due to a significant reduction in hotel apartment transactions. Excluding this outlier, there was a notable 17% increase in transactions. The total value of sales reached Dhs7.49 billion, a 31% year-on-year increase, highlighting the market’s underlying strength and resilience.
Demand for office space remained high, with transactions increasing by 19% year on year. The average price per square foot for office space saw a substantial increase of nearly 20%, driven by sustained demand from both local and international businesses.
Despite a year-on-year reduction of 3,355 rental transactions, mainly due to declines in retail (-1,585) and labor camp (-1,478) transactions, rental prices showed strength across key segments.
Office rents surged by 20% year on year, retail rents increased by 11%, and warehouse rents climbed by almost 19%, reflecting the competitive nature of the market. Although a quieter period is expected over the summer months, the outlook for Dubai’s commercial real estate market remains positive, supported by strong economic fundamentals and continued interest from global investors.
The top five communities by sales transactions for offices were Deira, DIP, Business Bay, Dubai Industrial City, and Business Bay, while retail sales transactions were highest in Deira, Bur Dubai, International City, JLT, and JVC.
tanvir@dubainewsweek.com
