The Dubai property market is set for solid growth this year. Demand will likely exceed supply again. Experts predict a 5% to 7% rise in prices. Rents are also expected to increase substantially. Costs may go up by 10% to 20% across the city. This leaves few options for tenants. Some may choose temporary leases for flexibility.
Predictions show that the rise in property prices will slow down after the big jump of 20-25 percent in 2023. It’s estimated to be about 4.5 percent in 2024 and drop to 3.0 per cent in 2025. Even though the increase is slowing, it should remain steady and still be a good investment.
Several reasons are causing this steady growth. More money is coming into Dubai from other countries, renters are becoming buyers, and more homes are ready for people to move into. Also, special visas for living in Dubai for a long time are attracting many investors.
With limited available units, investors have returns of over 6.5%. Landlords benefit from rising rents. However, tenants face difficulty finding affordable places. After pandemic restrictions were lifted, Chinese buyers are coming back. “Due to relaxed travel rules, many Chinese investors will return to the UAE market,” Remington commented. Areas like Expo City are attracting investment. Its infrastructure and sustainability attract more interest.
Experts point out the best communities in Dubai, like Palm Jumeirah, Jumeirah Bay, and Downtown Dubai, might see higher price increases in 2024. However, upcoming areas like Dubailand might not have as big of a price increase.
Concrete data supports these forecasts. Property prices in Dubai and Abu Dhabi increased by about 15 percent since the middle of 2021. While the real estate market will remain strong for the next year or so, the demand might not be as high as the past two years.
Developed communities like Arabian Ranches see renewed demand. Homeowners renovate and sell for higher prices. Prices also climbed in former “affordable” areas like JVC and Arjan, which are now catering to premium buyers. Traditionally, slow summer months may remain busy. High demand means no ideal buying time. Flexibility and quick action give buyers an edge in completing purchases.
The people buying properties fall into two groups: those living in the UAE who find it hard to afford homes due to high prices and people from other countries, mainly rich individuals, who pay in cash and feel Dubai is a safe place to invest.
Even if interest rates go up, property prices will cover up for the interest rate. However, the rents might also increase, making living costs higher. Economic experts believe the UAE’s economy will grow by about 4.5 percent in 2024. They also think Dubai’s population will reach 3.5 million by that year.
Economic factors like inflation and rates influence costs. New metro lines can boost values near stations. The off-plan properties in Dubai retain momentum as more residents plan long stays. Commercial real estate will likely grow further in 2024.
Builders in Dubai are constructing around 80,000 new homes in 2024. Experts think this is good for the market and will make the builders more profitable. Important figures supporting these predictions include Dubai’s population estimate for 2024 at 3.5 million, foreign investment of $50 billion in 2023, and average luxury properties in Dubai prices around $1 million in the last two quarters of 2023.
Overall, the outlook is positive despite global challenges. Dubai remains an attractive haven for local and foreign investors alike. Robust investment and population increases to support continued market expansion.
