Experts say that DUBAI’s real estate market will continue its upward trend this year, following a solid start in the first quarter as investors and end-users flock to buy residential properties in the emirate.
Steady Increase in Transactions and Prices
The latest data indicates that the emirate’s residential market has retained its appeal during the January-March 2024 quarter by reflecting solid double-digit growth in the number of transactions and values.
The market, which is expected to post over Dh100 billion in deals via more than 30,000 transactions in the first quarter, will steadily increase transactions and prices throughout the year due to solid need and an incremental rise in the emirate’s population in years to come.
The emirate documented a strong 30.91 percent YoY growth in residential expenses to Dh72 billion during the first two months of 2024 compared to Dh55 billion in the affiliated period last year. Concerning the number of transactions in January-February 2024, the emirate noticed 22,900 deals against 18,083 in the same months last year, reflecting a YoY growth of 26.6 percent.
Resilience and Adaptability Amidst Challenges
The industry stakeholders conveyed the Dubai property market has shown strength and adaptability despite challenging global economic conditions. They said the Dubai property market outlook is characterized by cautious optimism, driven by government initiatives and infrastructure developments.
Positive Outlook and Investor Confidence
Nadia Zahid, Property Consultant, Xperience Realty, said the Dubai real estate market outlook appears promising following a positive start in 2024.
“With significant launches from various developers such as Emaar and Nakheel garnering attention, coupled with a robust demand for off plan properties, the market shows resilience,” Nadia told BTR. She said government ambitions such as Economic Agenda D33 and Vision 2040 donate to investor enthusiasm, signaling long-term growth potential.
Additionally, she said infrastructure developments in critical areas like Dubai South and strategic positioning as a global business hub continue to attract 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 for Real Estate Diversification
Bas Kooijman, Chief Executive and Asset Manager of DHF Capital believes that the UAE is establishing itself as one of the world’s prime geographies for real estate diversification.
Referring to the latest data showing investment in Dubai’s real estate market has reached $100 billion in 2023 and is predicted to grow by five percent this year, he said the emirate’s terrain presents a striking and compelling prospect for people seeking multiple opportunities in real estate.
“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 short- and long-term gains,” Kooijman opined.
Anticipated Growth of 15% in Dubai’s Real Estate Market
Realiste, a specialized prop-tech firm in real estate investment solutions, anticipates a 15 percent growth in Dubai’s real estate market this year.
Alex Galt, the CEO and founder of Realiste, highlighted Dubai’s appeal in factors such as safety, cleanliness, tourism, and overall quality as an enterprising force behind its anticipated rise as a global real estate hub in 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,” Realist said.
Realiste’s AI analysis also identifies particular regions within Dubai, together with Business Bay Second and Palm Jumeirah, set to witness large price increases in 2024, further improving the elegance of actual estate investments in those locales. Additionally, this examine serves as a treasured device for stakeholders and traders looking for insights into the evolving dynamics of the worldwide actual property marketplace.
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Strong Population Growth and Residential Demand
In its annual report, Cushman & Wakefield Core, a real estate consultancy, pointed out that Dubai continues to witness strong population growth, adding 100,240 residents in 2023.
Regarding Dubai Statistics Centre and the 2040 Dubai Urban Master Plan, the real estate consultancy said the emirate currently has around 3.65 million residents, expected to rise to 5.8 million by 2040. “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.
In 2023, Dubai saw a 12 percent increase in enrolments, with an additional 39,000 students enrolling in private schools, indicating a potential increase in demand from young families, it added.
Rising Prices, Rents, and Project Launches
Prathyusha Gurrapu, Head of Research & Consulting at Cushman & Wakefield Core, said the residential market’s underlying sentiment is rising prices, rents, and project launches.
“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.
Affordability Concerns and Sustainable Growth
She said affordability is a growing preference 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 minimal 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.
Dubai’s Residential Market Has Emerged
Will McKintosh, Regional Partner and Head of Prime Residential for the Mena area at Knight Frank, said Dubai’s residential market is no longer rising. 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.
Unparalleled Lifestyle Offering and Sought-After Communities
He said the city’s comparable affordability, integrated with an outstanding lifestyle offering in one of, if not the safest cities in the world, means not only are international second home buyers zeroing in on the emirate, but residents in the town are remaining for longer and putting down roots, which is enabling the emergence of highly desired after communities away from the luxury beach-front mansions.
“For instance, we found a balance in Jumeirah Islands, which offered both tranquil lake views, newly renovated contemporary style homes & convenient access to local amenities,” he said.
Solid Performance in UAE’s Residential Market
CBRE Group, a Fortune 500 and S&P 500 company, has also reposed confidence in Dubai’s real estate market and anticipates that solid performance continues in the UAE’s residential market due to intense demand levels.
“Looking ahead, price growth in both Dubai’s apartment and villa segments of the market are likely to remain relatively strong; however, we expect that the price growth rate 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.
Robust Activity and High Absorption Levels
Taimur Khan, Head of Research at CBRE, stated the UAE’s residential market completed the 12 months on a solid observe, wherein the expanded demand stages keep to force overall performance.
“The robust levels of activity and high levels of absorption, which have reduced available supply, will continue to support price growth in Abu Dhabi and Dubai in the year ahead,” he said.
“Regarding rental growth, we expect rental rates in Abu Dhabi will continue to rise, with prime areas set to outperform the market. In Dubai, we expect rental growth to continue to moderate; however, it will remain positive in 2024,” he added.
