Dubai luxury real estate market

Q1 2024 review

The first quarter of 2024 marked a pivotal point for Dubai’s luxury real estate market. While growth continued, new trends and shifts in market dynamics began to emerge. Industry experts, including Engel & Völkers, CBRE, and Sands of Wealth, noted increased demand for high-end properties, while purchasing power in the mid-range segment slightly declined.

Overall market dynamics

At the start of 2024, the market maintained strong momentum, with total transactions rising by 43.8%. However, the structure of demand shifted: sales in the sub-AED 1,000 per square foot segment dropped by 19.3% year-on-year.
Sales Distribution by price (q1 2023)
Sales Distribution by price (q1 2024)
Declining purchasing power of the middle class
Rising interest rates in line with US Federal Reserve policy
Demand increasingly shifting toward the luxury segment

Segment analysis: villas and apartments

Luxury property sales:
  1. Sales of premium villas increased by 20% compared to Q1 2023
  2. Most in-demand areas:
    1. Saadiyat Island
    2. Palm Jumeirah
      These locations saw rising demand primarily driven by foreign investors and affluent buyers.
Apartment market:
  1. Apartment transactions rose by 12% year-on-year, slightly lagging behind the villa segment
  2. This suggests a more selective buyer approach, focused on:
    1. High-potential locations
    2. Exclusive developments

Price trends

Luxury property prices continued to rise,
though the pace of growth slowed considerably
Premium
villas:
  1. Quarterly price growth: only 1–2%
  2. Annual growth: remains strong at 19.9%
Premium
apartments:
Show a similar trend: quarterly deceleration with strong annual performance
Key drivers of the price slowdown:
  1. Market stabilization after two years of rapid growth
  2. Limited availability of new luxury developments

Rental market

The rental market in the luxury segment remains robust. Rents for luxury villas rose by 6%, while luxury apartment rents surged by an impressive 20% year-on-year.

Conclusion

Q1 2024 confirmed that Dubai’s luxury real estate market is undergoing a transformation, marked by a shift in buyer preferences toward more expensive and higher-quality properties. In the coming quarters, price stabilization is expected to continue, with strong demand persisting, particularly in the most exclusive areas of Dubai.

As a result, luxury real estate remains one of the most stable and promising sectors of the emirate’s economy, continuing to attract investors from around the world.

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