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.

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According to Bayut.com, properties in these areas provide the most enticing return on investment within the luxury and budget divisions.

Residential units in Dubai Marina are expected to offer the highest rental return for luxury apartments. At the same time, flats in International City are forecast to deliver the highest returns in the budget class at 9.22%.

Jumeirah Village Circle will be worth considering for those looking for affordable villas as it has produced the most alluring ROI of 6.9% in 2022.

Houses in the area have provided the “healthiest” rental yields of 6.95%, making DAMAC Hills a viable choice for those looking at buy-to-let villas.

Appealing Location

The UAE is a desirable investment location due to the nation’s comparatively cheap tax structure, alluring sales prices, high tenant demand, high-quality infrastructure and way of life.

Rents for apartments and villas have increased significantly since 2022 due to the high demand.

Asking rentals for apartments increased by 39% alone in Dubai Marina. Currently, the average rent in the region for a one-bedroom apartment is AED91,000 (USD 24,775); for a two-bedroom apartment, it’s AED140,000, and for a three-bedroom house, it’s AED207,000.

For potential purchasers looking for luxury residences, Dubai Marina has become one of the most sought-after areas.

According to Bayut, other well-liked areas in Dubai include Downtown Dubai, Arabian Ranches, and Dubai Hills Estate.

Spending Segment

The cost of renting a flat has dramatically increased in Jumeirah Village Circle, a desirable location for tenants in the lower income bracket, by 14% to 24% in 2022.

In 2022, renters were required to pay, on average, about AED36,000 for a studio apartment, AED51,000 for a one-bedroom apartment, and AED 73,000 for a two-bedroom apartment.

Three-and five-bed apartments in DAMAC Hills 2 now cost about AED63,000 and AED98,000, respectively, due to a 9% increase in rent. According to Bayut, annual rates for four-bed homes “became more affordable” by 5.3%, with an average of AED74,000 in 2022.

According to Bayut’s estimates, sales prices for housing properties in Dubai’s most prestigious neighbourhoods will rise by 2% to 24% in 2022.

The real estate market has “outperformed expectations over the last year, as evidenced by record-breaking transactions, appealing new launches, and favourable investment opportunities,” Bayut added.

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The villa sold was built from scratch and was designed keeping in mind the key details of the buyers.

The buyer of the villa is a European who has recently shifted to Dubai along with his family. In the past four months, European buyers were among the most active, particularly at the upper end of the market.

Speaking with Gulf News, Kunal Singh Gupta, Associate Director of Luxhabitat Sotheby’s International Realty, said that the villa was presented to the buyers in an immaculate condition which was well-appreciated by them.

He further added that the most desired luxury homes right now are those that are built-in modern-Mediterranean style, came with a larger plot and built-up area, and views of the beach, golf course, or a park.

In 2022, it has been recorded that over Dh4.6 billion sales were made on the Palm which also included one sale of Dh280 million. It has been regarded as the costliest deal made on the residential space in Dubai.

According to Trade Arabia, a survey, using the data from the Dubai Land Department, conducted by Luxhabitat Sotheby’s stated that the top ten most expensive apartments which were sold in Q1 of 2022 were from the areas of Palm Jumeriah, Emirates Hills, Jumeira Bay, and Downtown Dubai.

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According to the Knight Frank report, over the next five years, the retail stock is expected to increase by 56 percent to 5.91 million square metres in Dubai’s real estate market.

The number of residential units to be added to the Dubai property market this year will be the highest in over a decade. The last time Dubai witnessed such a huge addition to its property market was back in 2008 when a record 70,885 units were added to the market.

According to a report published in December, even though property prices in Dubai are expected to drop 11.3 percent on average this year, the market is expected to get better in 2020 as property price decline is expected to slow down. According to the media report, Dubai will see a 5 percent to 7 percent correction as demand increases.

Recently, high-end property broker Luxhabitat revealed that Dubai’s prime residential property market witnessed a growth of around 22 percent in 2019 when compared to the previous year.

The Knight Frank report also revealed that an estimated 35,171 new units were delivered in Dubai last year.

Taimur Khan, associate partner at Knight Frank Middle East told the media, “While performance in the UAE’s real estate sectors has continued to soften on average, we have begun to see the performance in certain market segments and asset grades being to fragment. More so, the introduction of a range of regulations to increase the ease of doing business and balance out supply and demand will enhance the fundamentals offerings of the UAE’s property market and in turn, enhance confidence from developers and investors.”

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Dubai’s property market has suffered a major setback in recent times due to oversupply in the market.

Dubai is gearing up to welcome around 14 million overseas visitors for Expo 2020. The event is expected to yield an investment windfall of $33.2 billion in this decade. During the same period, the event is expected to create around one million jobs and positively impact the overall property market.

In 2018, the government in Dubai also established a committee to oversee the market and ensure fair competition.

Abdulla Bin Sulayem, CEO at Seven Tides International told the media, “Despite ongoing concerns about supply and demand dynamics, it is important to understand that competition in itself is very healthy, and as a result one of the primary aims of the newly formed committee will be to enhance the competitiveness of the real estate sector as a whole – continuously encouraging developers to come up with new and innovative projects that make Dubai, and indeed the UAE, stand out in the global property market.”

Last year, local media also reported that the decline in property prices in Dubai will reduce in 2020.

Some experts and industry executives believe that Dubai’s property market has matured over the years. According to them, once the market achieves stability, property investment will come down to a more practical and realistic level.

Local consulting firm ValuStrat recently reported that Dubai’s real estate sector recorded double-digit growth in residential and office sales during the fourth quarter of 2019. This is due to the reduction in supply to the market.

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According to reports, Standard Chartered has been hired by Emaar Properties to coordinate the issuance of Islamic bonds. Other banks involved are Deutsche Bank, First Abu Dhabi Bank, Emirates NBD Capital, Mashreq Bank, Dubai Islamic Bank, and Sharjah Islamic Bank.

The Islamic bond issuance is a part of Emaar Properties’ $2 billion debt raising programme. The recent developments can be attributed to the performance of Dubai’s property market which has seen a substantial price drop due to oversupply.

Vice President of the United Arab Emirates, Sheikh Mohammed bin Rashid Al Maktoum has recently announced that Dubai is setting up a real estate planning commission which will act as a regulatory body to avoid competition between government-backed companies and private firms. The commission was also established to control the oversupply in Dubai’s property market.

Emaar Properties is also expected to be a part of the committee, known as the Higher Committee for Real Estate Planning.  Other members of the committee include state-owned developers such as Nakheel.

The company, which is Dubai’s largest listed developer, reported a 52 percent increase in sales in the first six months of 2019 which stood at $2.571 billion.

Recently, Emaar Properties’ hospitality wing unveiled its seventh hotel under its premium luxury Address Hotels and Resorts brand in Dubai.

Chris Newman, chief operating officer of Emaar Hospitality Group had told the media that, “With its central location in Downtown Dubai, the famed Address service experience, proximity to the most popular attractions in Dubai, and its diverse selection of amenities will add to the appeal of Address Fountain Views to leisure and business visitors.”

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