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Dubai United Arab Emirates
According to experts, the DUBAI real estate market will keep growing this year after getting off to a great start in the first quarter as buyers of residential properties in the emirate continue to pour money into the market.
According to recent data, the residential market in the emirate experienced strong double-digit growth in both transaction volume and value during the January–March 2024 quarter, indicating that it has maintained its appeal.
Strong demand and a gradual increase in the emirate’s population in the coming years will cause the market, which is predicted to post over Dh100 billion in sales through more than 30,000 transactions in the first quarter, to sustain steady price and transaction increases throughout the year.
In the first two months of 2024, residential prices in the emirate increased by a robust 30.91 percent year over year to Dh72 billion, from Dh55 billion in the same period the previous year. The emirate saw 22,900 transactions in January through February of 2024 compared to 18,083 in the same months the previous year, representing a year-over-year increase of 26.6%.
The industry participants stated that despite difficult worldwide economic conditions, the Dubai real estate market has proven resilient and adaptable. They claimed that cautious optimism, fueled by government initiatives and infrastructure developments, characterizes the outlook for the Dubai real estate market.
After a strong start in 2024, Nadia Zahid, Property Consultant at Xperience Realty, said the future of the Dubai real estate market looks bright.
“With significant launches from various developers such Emaar, Nakheel, garnering attention, coupled with a robust demand for off-plan properties, the market shows resilience,” Nadia told BTR. She said government initiatives such as Economic Agenda D33 and Vision 2040 contribute to investor confidence, signaling long-term growth potential.
She added that strategic positioning as a global business hub and infrastructure developments in important areas like Dubai South continue to draw investors.
“Despite potential challenges, including global economic fluctuations and geopolitical uncertainties, Dubai’s real estate market is poised to sustain its upward trend, offering lucrative opportunities for both local and international investors seeking stable returns in a dynamic market landscape,” she said.
WORLD’S PRIME GEOGRAPHY
The UAE is emerging as one of the world’s top regions for real estate diversification, according to Bas Kooijman, Chief Executive and Asset Manager of DHF Capital.
Concerning the most recent data, which indicates that investment in Dubai’s real estate market reached $100 billion in 2023 and is expected to grow by 5% this year, he stated that the emirate’s topography offers a singular and alluring opportunity for individuals looking for multiple real estate opportunities.
“High rental income potential, paired with impressive growth projections, makes Dubai a strategic choice to build resilient and diversified portfolios. With developers launching projects at an unprecedented pace, investing in desirable locations and futuristic builds can offer both short and long-term gains,” Kooijman opined.
GROWTH CATALYST
This year, Dubai’s real estate market is expected to grow by 15%, according to Realiste, a specialized prop-tech company offering real estate investment solutions.
Dubai’s attraction in areas like safety, cleanliness, tourism, and general quality, according to Alex Galt, CEO and founder of Realiste, is what will propel the city’s predicted ascent to prominence in the global real estate market by 2024.
“In 2024, Dubai’s real estate market is poised for significant growth, estimated at approximately 15 percent, driven by robust demand, a thriving economy, and heightened foreign investor interest,” according to Realiste.
The AI analysis conducted by Realiste has also identified specific areas in Dubai, such as Business Bay Second and Palm Jumeirah, that are expected to experience significant price increases in 2024. These findings add to the appeal of real estate investments in these areas. Furthermore, stakeholders and investors looking for information on the changing dynamics of the global real estate market will find this study to be a useful resource.
The real estate consultancy Cushman & Wakefield Core noted in its annual report that Dubai will add 100,240 new residents in 2023, demonstrating the city’s continued strong population growth.
According to the real estate consultancy, the number of people living in the emirate is expected to rise from 3.65 million to 5.8 million by 2040, citing data from the Dubai Statistics Centre and the 2040 Dubai Urban Master Plan. “That reflects an increase of over 2.15 million residents in the next 17 years. With an approximate household size of 4.2, Dubai would need nearly 30,000 residential units consistently every year until 2040 to cater to this growing population,” according to the report.
According to the report, Dubai experienced a 12% rise in enrollment in 2023. An extra 39,000 students enrolled in private schools, suggesting a possible rise in demand from young families.
NO SIGN OF CONTRACTION
Rising prices, rents, and project launches are the underlying sentiments in the residential market, according to Prathyusha Gurrapu, Head of Research & Consulting at Cushman & Wakefield Core.
“While the pace has started to moderate over the fourth quarter of 2023, we don’t see any signs of contractions in the market yet,” Gurrapu said.
She said affordability is a growing concern for the low to mid-market segment. “Although we don’t foresee the sharp rises witnessed in 2023 to continue in 2024, we believe the market will see rises at sustainable levels,” she said. “With very limited post-handover payment plans now seen in the off-plan market, and the potential lowering of the interest rates later in 2024, these are expected to support the secondary sales market and help moderate sales price increases,” she added.
The residential market in Dubai is no longer developing, according to Will McKintosh, Regional Partner and Head of Prime Residential for Mena at Knight Frank. It has emerged.
“The nature of buyers in the market is testament to this shift, as is the type of real estate being developed in the city, much of which would not look out of place in other global cities,” he said.
In addition to international second home buyers being drawn to the emirate, he said the city’s relative affordability and unmatched lifestyle offerings in one of the safest cities in the world are encouraging the emergence of highly sought-after communities away from the opulent beachfront mansions. Residents are also staying longer and establishing roots in the city.
“For instance, we found a balance in Jumeirah Islands, which offered both in terms of tranquil lake views, newly renovated contemporary style homes & convenient access to local amenities,” he said.
A Fortune 500 and S&P 500 company, CBRE Group has also expressed confidence in the Dubai real estate market and believes that high demand levels will support continued strong performance in the UAE’s residential market.
“Looking ahead, price growth in both Dubai’s apartment and villa segments of the market are likely to remain relatively strong; however, we do expect that the rate of price growth will taper off. In the rental market, on the back of the prevailing market fundamentals, the lack of supply, and heightened demand levels, we expect that residential rents in Dubai will maintain their upward trajectory; that being said, the rate of growth will likely moderate further,” according to CBRE report on the UAE residential market.
The residential market in the United Arab Emirates concluded the year strongly, according to Taimur Khan, Head of Research at CBRE, with performance being driven by high levels of demand.
“The robust levels of activity, high levels of absorption, which have reduced available supply, will continue to support price growth in both Abu Dhabi and Dubai in the year ahead,” he said.
“In terms of rental growth, we expect that rental rates in Abu Dhabi will continue to rise, with prime areas set to outperform the market. In Dubai, we expect that rental growth will continue to moderate, however, still remain positive in 2024,” he added.
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