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Fri, Nov 15, 2024 | Jumada al-Awwal 13, 1446 | DXB
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Dubai Real Estate Demand Persists
The market, which is expected to post over Dh100 billion in sales through more than 30,000 transactions in first quarter, will sustain steady increase in transactions and prices throughout the year
- By
- Muzaffar Rizvi
Dubai has recorded a strong 30.91 per cent year-on-year growth in residential prices to Dh72 billion during the first two months of 2024 compared to Dh55 billion in the corresponding period last year.
DUBAI real estate market will continue its upward trend this year following a strong start in first quarter as investors and end-users flock to buy residential properties in the emirate, experts say.
Latest data indicates that the emirate’s residential market has retained its appeal during the January-March 2024 quarter by reflecting a strong double-digit growth in terms of number of transactions and values.
The market, which is expected to post over Dh100 billion in sales through more than 30,000 transactions in first quarter, will sustain steady increase in transactions and prices throughout the year due to strong demand and a gradual rise in the emirate’s population in years to come.
The emirate has recorded a strong 30.91 per cent year-on-year growth in residential prices to Dh72 billion during the first two months of 2024 compared to Dh55 billion in the corresponding period last year. In terms of number of transactions in January-February 2024, the emirate witnessed 22,900 deals as against 18,083 in the same months last year, reflecting a year-on-year growth of 26.6 per cent.
The industry stakeholders said the Dubai property market has shown resilience and adaptability despite challenging global economic conditions. They said the Dubai property market outlook is characterised by cautious optimism, driven by government initiatives and infrastructure developments.
Nadia Zahid, Property Consultant, Xperience Realty, said the outlook for the Dubai real estate market appears promising following a positive start in 2024.
"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, signalling long-term growth potential.
Additionally, she said infrastructure developments in key 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
Bas Kooijman, Chief Executive and Asset Manager of DHF Capital, is of the view that the UAE is establishing itself as one of the world’s prime geographies for real estate diversification.
Referring to latest data showing investment in Dubai’s real estate market has reached $100 billion in 2023 and is predicted to grow by five per cent this year, he said the emirate’s landscape presents a unique and compelling opportunity for people seeking multiple opportunities in real estate.
Realiste, a specialised prop-tech firm in real estate investment solutions, anticipates a 15 per cent growth in Dubai's real estate market this year.
“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
Realiste, a specialised prop-tech firm in real estate investment solutions, anticipates a 15 per cent growth in Dubai's real estate market this year.
Alex Galt, the CEO and founder of Realiste, underscored Dubai's appeal in aspects such as safety, cleanliness, tourism, and overall quality as a driving 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 per cent, driven by robust demand, a thriving economy, and heightened foreign investor interest,” according to Realiste.
Realiste's AI analysis also identifies specific areas within Dubai, including Business Bay Second and Palm Jumeirah, set to witness substantial price increases in 2024, further enhancing the attractiveness of real estate investments in these locales. Additionally, this study serves as a valuable tool for stakeholders and investors seeking insights into the evolving dynamics of the global real estate market.
Cushman & Wakefield Core, a real estate consultancy, in its annual report pointed out that Dubai is continuing to witness strong population growth with an addition of 100,240 residents in 2023.
Referring to Dubai Statistics Centre and the 2040 Dubai Urban Master Plan, the real estate consultancy said the emirate currently has over 3.65 million residents that is expected to increase to 5.8 million by 2040. “That reflects an increase of over 2.15 million residents in the next 17 years. With an approximately 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 per cent increase in enrolments, with an additional 39,000 students enrolling in private schools indicating a potential increase in demand from young families, it added.
NO SIGN OF CONTRACTION
Prathyusha Gurrapu, Head of Research & Consulting at Cushman & Wakefield Core, said the underlying sentiment in the residential market is that of rising prices, rents, and project launches.
“While the pace has started to moderate over fourth quarter of 2023, we don’t see any signs of contractions in the market yet,” Gurrapu said.
Aerial view of Dubai Palm Jumeirah Island. The Dubai property market has shown resilience and adaptability despite challenging global economic conditions.
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.
Will McKintosh, Regional Partner and Head of Prime Residential for Mena region at Knight Frank, said Dubai’s residential market is no longer emerging. 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.
He said the city’s relative affordability, combined with an unparalleled 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 city are staying for longer and putting down roots, which is fostering the emergence of highly sought after communities away from the luxury beach-front mansions.
“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.
CBRE Group, a Fortune 500 and S&P 500 company, has also reposed confidence in Dubai real estate market and anticipates that strong performance continues to be seen in the UAE’s residential market on the back of strong 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 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.
Taimur Khan, Head of Research at CBRE, said the UAE’s residential market ended the year on a strong note, where the elevated levels of demand continue to drive performance.
“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.
— muzaffarrizvi@khaleejtimes.com
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