Sales prices for residential property in Dubai have risen by up to 34 per cent in some areas in the last year, with commercial property increasing as much as 29 per cent, according to real estate advisory, Chestertons MENA.
Rental rates for homes have climbed by up to 36 per cent, with commercial leasing rates seeing hikes of more than a third in some business zones.
Chestertons examined residential and commercial sales and leasing prices in some of Dubai’s most in-demand areas, reporting substantial increases in both sectors – and slight reductions for home prices in some areas. The research covers ready homes in Palm Jumeirah, Downtown, Dubai Hills, Mohammed Bin Rashed City and Dubai Marina, and commercial space in Jumeirah Lakes Towers, Business Bay, Barsha Heights and Dubai Investments Park.
Dubai Hills has seen the strongest growth in both apartment and villa prices, with impressive year-on-year increases also seen at Mohammed Bin Rashed City apartments – a reflection of the popularity and evolution of these communities as they mature.
The consultancy said commercial property is also booming, with Q3 sales prices increasing by up to 28 per cent and rental rates by as much as 36 per cent compared to last year. Sustained increases have been witnessed in commercial space sales transactions – driven partly by rising rents and the potential threat of eviction – with up to 44 per cent more deals closed in the first nine months of this year compared to the same period in 2022.
In the locations studied, the cost of buying a home in Q3 2023 was up to 34 per cent higher compared to the same period last year.
The biggest hike for both villas and apartments was at Dubai Hills, with villas averaging AED2,409 per square foot – more than a third higher than in Q3 2022 and 9 per cent up on Q2 2023. Apartments in Dubai Hills cost an average of AED1,882 a sq ft in Q3 this year, an increase of 25 per cent from 2022, and a 6 per cent jump compared to April – June this year.
On Palm Jumeirah, where villas and apartments command the highest prices per square foot, year-on-year apartment prices rose by 17 per cent, reaching AED2,632 per sq ft (a 9 per cent increase on the previous quarter), while year-on-year villa prices fell by 2 per cent to AED5,094 per sq ft.
Prices continued their upward trend in Dubai’s Downtown area: apartments cost AED2,236 a sq ft in Q3 this year—a jump of 14 per cent on Q3 last year and 3 per cent on Q2 2023. At Mohammed Bin Rashid City, apartment prices were AED1,760 per sq ft in Q3, which is 25 per cent up on 2022 and 4 per cent higher than three months ago.
Dubai Marina prices were AED1,562 per sq ft in Q3 – up 15 per cent on last year and 2 per cent higher than the previous quarter.
Average residential sales prices Q3 2023, Q3 2022 and Q2 2023:
| Area | Property Type | Q3 2023
(AED/sq ft) |
Y-o-Y % Difference (Q3 2023 vs Q3 2022) | Q-o-Q % Difference (Q3 2023 vs Q2 2023) |
| Dubai Hills | Apartment | 1,882.00 | Up by 25% | Up by 6% |
| Dubai Hills | Villa | 2,409.00 | Up by 34% | Up by 9% |
| Downtown | Apartment | 2,236.00 | Up by 14% | Up by 3% |
| Palm Jumeirah | Apartment | 2,632.00 | Up by 17% | Up by 9% |
| Palm Jumeirah | Villa | 5,094.00 | Down by 2% | Down by 2% |
| MBR City | Apartment | 1,760.00 | Up by 25% | Up by 4% |
| MBR City | Villa | 1,874.00 | Down by 19% | Up by 10% |
| Dubai Marina | Apartment | 1,562.00 | Up by 15% | Up by 2% |
Chestertons also checked year-on-year residential leasing rates for the same areas, revealing substantial increases for villas and apartments. Average annual rents for a 2-bedroom apartment rose by up to 27 per cent, with a hike of as much as 46 per cent for villas.
Year-on-year average residential annual rentals Q3 2023 versus Q3 2022:
| Area | Property Type | Average Rent Q3 2023 (AED) | Average Rent
Q3 2022 (AED) |
Y-o-Y % Difference
(Q3 2023 v Q3 2022) |
| Dubai Hills | 2-bed apartment | 123,000 | 96,000 | Up 28 % |
| Dubai Hills | 3-bed villa | 279,000 | 191,000 | Up 46 % |
| Downtown | 2-bed apartment | 157,000 | 138,000 | Up 14 % |
| Palm Jumeirah | 2-bed apartment | 179,000 | 152,000 | Up 18 % |
| Palm Jumeirah | 4-bed villa | 660,000 | 497,000 | Up 33 % |
| MBR City | 2-bed apartment | 120,000 | 93,000 | Up 29 % |
| MBR City | 4-bed villa | 861,000 | 606,000 | Up 42 % |
| Dubai Marina | 2-bed apartment | 132,000 | 109,000 | Up 21 % |
Business booming for commercial property
Chestertons studied commercial rates in four key areas of Dubai for its Q3 2023 research, which showed continued annual and quarterly prices rises for sales and rentals.
The biggest year-on-year increases in sales prices were Jumeirah Lakes Towers, with a hike of 29 per cent, followed by Business Bay, with an increase of 14 per cent. In Q3 this year, commercial space in JLT averaged AED1,117 per sq ft; at Business Bay it was AED1,187 a sq ft.
Chestertons also reports big rises in sales transactions for both areas, with 689 deals closed for JLT in the first nine months of this year – a 31% increase compared to the same period in 2022. At Business Bay, there were 947 transactions up to Q3 this year and 656 to Q3 last year – a 44 per cent rise. Office space at Business Bay is in high demand because it is strategically located and offers newer buildings with better parking options than Dubai’s older, more traditional business hubs.
JLT also saw the biggest year-on-year rise in commercial rental costs, with a 36 per cent hike on the same period last year, followed by Business Bay at 34 per cent. Q3 leasing rates were AED122 per sq ft at JLT and AED155 a sq ft at Business Bay.
There was a 10 per cent year-on-year jump in sales prices in Barsha Heights, with commercial space commanding AED856 per sq ft in Q3 this year. Meanwhile, rental rates at Barsha Heights, rose by 9 per cent year-on-year to AED138 per sq ft in Q3 2023, but dropped by 2 per cent quarter-on-quarter. Office occupancy at Barsha Heights remains high.
At the industrial hub of Dubai Investments Park, where there is a growing demand for warehousing because of surge in e-commerce business, rental prices were AED119 a sq ft in Q3 this year – an increase of 22 per cent compared to Q2 and 10 per cent year-on-year .
Average commercial sales and leasing prices for Q3 2023, Q3 2022 and Q2 2023:
| Area | Sales/Rent | Q3 2023
(AED/sq ft) |
Y-o-Y % Difference (Q3 2023 vs Q3 2022) | Q-o-Q % Difference (Q3 2023 vs Q2 2023) |
| Jumeirah Lakes Towers | Rents | 122.00 | Up by 36% | Up by 20% |
| Jumeirah Lakes Towers | Sales | 1,117.00 | Up by 29% | Up by 13% |
| Business Bay | Rents | 155.00 | Up by 34% | Up by 23% |
| Business Bay | Sales | 1,187.00 | Up by 14% | Down by 5% |
| Barsha Heights | Rents | 138.00 | Up by 9% | Down by 2% |
| Barsha Heights | Sales | 856.00 | Up by 10% | Up by 6% |
| Dubai Investments Park
(warehousing) |
Rents | 119.00 | Up by 10 % | Up by 22% |
Ends
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