by humayunbaig 
As we step into the first quarter of 2024, Dubai’s Real Estate Landscape market is presenting an intriguing dichotomy of stability in villa rentals juxtaposed with a potential surge in apartment rents. This perspective comes from Haider Tuaima, the esteemed Director and Head of Real Estate Research at Valustrat.
Market Overview: Villas vs Apartments
According to Tuaima, despite the 81% growth in villa rents since the pandemic (now averaging AED 398,700 annually, a decadal high), this segment is expected to maintain its current rates in the upcoming months. On the other hand, apartments, standing at AED 82,000 per annum after a 49% hike over three years, are poised for further growth. These insights were shared during the release of ValuStrat’s Q4 2023 Dubai Real Estate Report.
Record Rent Increases Amidst Soaring Demand
Dubai’s property market experienced record-breaking annual growth in rents across all sectors in Q4 2023. The residential segment led the charge with a 12.8% increase year-on-year, propelled by a 15.9% growth in apartment rents. As a result, average apartment rents now fluctuate between AED 54,000 and AED 176,000.
In comparison, villa rents saw a moderate rise of 9.2%, amounting to AED 310,000 to AED 492,000. Meanwhile, office spaces witnessed a staggering 58.4% hike over the past two years, with average rents peaking at AED 1,454 per sqm. Top districts like DIFC now command over AED 1,600/sqm.
Factors Influencing the Rental Market
The report highlighted several factors contributing to this surge in rents, including population growth, business expansion, remote working trends, and economic recovery. These factors are driving high occupancy rates and rental inflation by increasing demand while supply remains limited.
As we move through 2024, experts anticipate that rents will continue to rise. The rapid population growth and booming non-oil sectors in the emirate are surpassing new supply of housing, offices, and warehouses.
A Strong Finish to 2023 for Dubai’s Property Market
In 2023, Dubai’s real estate sector ended impressively, with Q4 seeing record highs in rents, capital values, and transaction volumes across all main asset classes. Residential prices saw their most substantial annual growth in ten years, climbing 19.9% according to ValuStrat’s Price Index (VPI).
Apartment values witnessed a 15.4% surge, while villas topped the list with a 24.9% increase. Mid-tier communities like Discovery Gardens and Dubai Silicon Oasis were among those experiencing the fastest price rises.
Prime property maintained its bullish run, with valuations in high-end areas soaring 20.9% over the year. Q4 also marked an all-time high in ready home sales, with over 12,000 transactions recorded.
Office spaces also excelled last quarter, achieving record capital values and transaction volumes, rising 32.1% and 21.9% respectively year-on-year.
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