Property experts anticipate the continued buoyancy for several reasons, such as the Emirati city’s expanding attraction as a haven for the wealthy, the increased appetite of investors, the influx of professionals, and the population growth.

As to their statement, rental prices would see continuous upward pressure if net migration to Dubai was higher than the rate of new home handovers.

More people choosing to own rather than rent their houses, together with the growing popularity of real estate as an appealing investment option, are two factors that could determine the direction of rents in 2024.

Ilnara Muzafyarova, head of Colife, a real estate management company, says that after a dramatic increase in rental prices by 23% annually in the first half of 2023 and a year-end prediction of almost 30%, the upward trend appears robust.

Muzafyarova projected that short-term rentals (up to six months) would increase by 20% from 2023, while long-term rentals (more than six months) would increase by 15%. The market’s natural expansion serves as a solid foundation for this and from mid-2022 to mid-2023, apartment prices increased by 15%.

S&P predicted in November 2023 that home prices would rise by 5.0% to 7.0% in 2024. According to Tatiana Leskova, associate director of corporate ratings at S&P, there isn’t any proof that Dubai’s property market is slowing down in 2024.

According to analysts at real estate consulting firm CBRE, during January 2020, rents in Dubai have grown by over 42%, while home prices have surged by about 33%. Analogously, villa rentals saw a rise in average rent of 19.2% in November 2023, reaching USD 88,400 annually.

Experts noted that the growing trend in rentals is a reflection of Dubai’s thriving real estate market, where property values are rising in tandem with the construction of new high-rise buildings and a surge in real estate transactions.

Colife, the owner of a one-bedroom apartment in Dubai Marina, had a significant rise in monthly income over the previous year of 21.2%, reaching USD 2,970.

According to Colife, owners should expect even larger returns in the neighbourhood of USD 3,415 per month in 2024.

Real estate analysts predict a steady demand for residential space in Dubai due to the city’s growing population and ongoing influx of international professionals.

The third quarter saw a steady reduction in the growth rate of the Dubai rental market, according to real estate consultancy Asteco. With rental increases for flats, villas, and workplaces of 3.0%, 2.0%, and 4.0% over the three months, there has been a noticeable slowdown. According to Asteco, the changes were 18%, 19%, and 29% annually, respectively.

According to Property Finder’s November research, demand is greatest for one-bedroom apartments. Searches for one-bedroom apartments accounted for about 36% of the population, compared to searches for two-bedroom flats (30%) and studio apartments (24%).

While 42% of those looking for villas or townhouses had three bedrooms in mind, while 35% wanted a larger property with four bedrooms. Some 66% of tenants chose furnished apartments, while 32% sought unfurnished. Of those looking for villas or townhouses, 51% found unfurnished listings and 48% found furnished ones.

The Dubai Statistical Centre estimates that as of July 2023, 3,604,030 people were living in Dubai, up from 3,515,264 in July 2022. The Development Master Plan for Dubai projects that by 2040, there will be 5.8 million people living in the city.

The post Experts predict up to 20% increase in Dubai’s upscale residential rents appeared first on International Finance.

According to Property Finder research released recently, almost 60% of those who purchased real estate last month wanted to own an apartment, and about 40% were interested in buying villas or townhouses.

About 82% of renters were searching for apartments in the rental market, while 18% were looking for townhouses or villas. About 39% of prospective tenants chose unfurnished apartments, but 67% of those looking for housing picked furnished apartments.

The property portal reports that in October, Dubai registered 7,128 real estate sales totalling AED29.7 billion, a 17.46% increase in value over the same month the previous year.

Apartment buyers’ top choices were Downtown, Palm Jumeirah, Jumeirah Village Circle, Dubai Marina, and Business Bay.

The most sought-after areas for purchasers desiring to purchase townhouses or villas were Mohammed Bin Rashid City, Palm Jumeirah, Arabian Ranches, Dubai Hills Estate, and Al Furjan.

Property Finder also reported that there were 5,602 sales of existing properties, a 36.8% increase from the previous year. Additionally, the value of existing properties increased by 81% to approximately AED 25.7 billion, the biggest transaction value for October in the segment’s history.

According to a recent analysis by CBRE, the residential market in Dubai experienced a decline in activity as of September 2023, primarily because of a contraction in the off-plan category.

During the month, off-plan sales in Dubai decreased by 41.5%, while sales in the secondary market increased by almost 33%.

The post Dubai’s real estate boom: AED30 billion in 30 days appeared first on International Finance.

As future rate hikes are executed and investors’ purchasing power is predicted to deteriorate, it is expected that mortgage transactions and project launches, in particular, will experience some declines in 2023 compared to 2022.

Positively, as developers finish off ongoing projects, sales prices and rental rates will continue to be “elevated,” and the market will continue to add to its supply stock.

According to Asteco’s estimate, which was made public recently, the number of apartments and villas being built in the emirate would increase by almost 47,700 in 2023, or 53.8% more than they did in 2022. Around 40,000 units will be apartments, with 7,700 residential villas making up the remaining supply.

The momentum is anticipated to weaken as the spending power of foreign investors is impacted by restrained global growth, according to Asteco. Nevertheless, new project launches will continue to occur in 2023.

HP Aengaar, CEO of Asteco, stated in the report, “with more but smaller interest rate hikes expected in 2023, we anticipate a drop in mortgage transactions.”

Foreign Investment

Asteco said that due to the UAE’s image as a haven, progressive business reforms, and visa-related measures, the country would continue to witness “strong inward investment” in the real estate sector.

Although we expect the euphoria to fade and activity to reduce in the aftermath of global turbulence, from which the UAE is ultimately not immune, Asteco predicted that this would positively affect the real estate market.

The consulting company added that the emirate and the rest of the UAE have shown “impressive levels” of grit in the wake of the COVID outbreak in 2022.

It claimed that increased oil prices, a rebound in trade, and economic growth had caused inbound investment to soar significantly and transactions to reach new highs.

Thirty-one thousand residences, including 27,000 flats and 4,000 villas, were delivered in Dubai in 2022. In addition to being considered, the number of units that came online in the same timeframe was “impressive given the global economic challenges and supply-chain disruptions,” according to Asteco.

As average rental rates in the apartment and villa segments kept rising, project launches in the emirate also picked up speed toward the end of 2022. According to Asteco, rental rates for flats and offices increased by 19%, while those for villas saw a 23% yearly surge.

The post Dubai real estate market ‘momentum’ to weaken in 2023 appeared first on International Finance.

As per CBRE’s “Dubai Residential Market Snapshot, December 2022”, some 81,919 residential transactions were reported in the year to date through November 2022, breaking the previous record highs set during the same period in 2009.

The average price rose by 9.5% during the year ending in November 2022. The average cost of an apartment increased by 9.0%, while the villa price hiked by 12.7%.

As per CBRE, the average price of a Dubai apartment was AED 1,161 per square foot, while the average cost of a villa was AED 1,374 per square foot.

The apartment and villa prices are however, still 22.0% and 4.9% lesser than the 2014 highs.

Head of Research at Mena, Taimur Khan, said, “Activity levels in Dubai’s residential market have reached record levels in the year-to-date to November with total transactions volume reaching 81,919, surpassing record highs of full year 2009, when transaction numbers totaled 81,182.”

“The average price of flats and villas increased by 9.0% and 12.7%, respectively, in the 12 months leading up to November 2022 thanks to this high level of activity. However, we are observing a decrease in the rate of average price growth, notably in the villa market, and in the near future, we anticipate the apartment market to follow suit,” Taimur Khan added.

He continued, “That being said, certain prime markets will continue to record strong growth rates.”

As per Khan, Jumeirah had the highest sales rate per square foot in the apartment market at AED 2,310, while Palm Jumeirah had the highest sales rate per square foot in the villa market at AED 3,802.

In the year leading up to November, average asking rentals increased by 27.3%, with average apartment rents rising by 27.6% and average villa rents rising by 25.4%, respectively.

Taimur Khan emphasized that typical rents in the rental sector rose at rates very close to records.

“In reaction, tenants appear more likely to extend their current leases. As a result, the number of new contracts registered year over year ending in November 2022 decreased by 5.8%, while renewals grew by 33.8%, according to Ejari statistics, which illustrates this,” Taimur Khan remarked.

The post Dubai real estate market hits new high in November appeared first on International Finance.