Thu, Dec 19, 2024 | Jumada al-Aakhirah 18, 1446 | DXB ktweather icon0°C

Dubai property market to see highest growth in 2024 among major global cities: report

However, a consistent increase in prices has prompted some analysts to caution against a slight short-term correction in the emirate’s real estate scene

Published: Tue 24 Sep 2024, 5:41 PM

Updated: Tue 24 Sep 2024, 10:04 PM

Top Stories

Dubai’s property market will see the highest growth among major global cities this year, but high new supply could trigger a moderate correction in the short term.

According to UBS Global Real Estate Bubble Index 2024 released on Tuesday, Dubai’s score has increased from 0.14 in 2023 to 0.64 this year. Meanwhile, the emirate’s ranking in the index has increased from 23rd last year to 14th this year.

Property prices and rentals in Dubai have been on the rise for the past three and a half years, driven by the increased population, increasing by nearly 230,000 since the beginning of last year. This consistent increase in prices has prompted some analysts to caution against a slight short-term correction in the emirate’s real estate market.

Stay up to date with the latest news. Follow KT on WhatsApp Channels.

The emirate’s house market was rated fair valued last year and this year it has elevated to the moderate bubble risk category.

“After a seven-year price correction, the bubble risk signal in Dubai was low in 2020. Since then, transaction numbers have reached new all-time highs each year and excess supply has been absorbed. In the last four quarters, real housing prices increased by almost 17 per cent and are 40 per cent higher than in 2020. A high proportion of – likely speculative – off-plan transactions and an elevated new supply could trigger a moderate price correction in the short term,” the Swiss bank said in its annual report.

“Only a moderate risk is recorded in Amsterdam, Sydney, and Boston. In the same risk category are, after very strong reductions in imbalances, Frankfurt, Munich, Tel Aviv, and Hong Kong. Vancouver, Dubai, Singapore and Madrid complete this group of moderate-bubble-risk cities. Dubai recorded the strongest increase in the risk score of all the cities analysed,” UBS said.

According to Emirates NBD Research released in September, the number of transactions recorded across the city has pushed the overall units sold in 2024 to 104,250, only 14,000 units short of the total transactions recorded in 2023, reflecting massive off-plan supply launched this year.

The Swiss bank’s annual study projected that house prices in Dubai would achieve over 5 per cent growth annually in 2024, followed by Warsaw, Miami, Amsterdam, Tokyo, Vancouver, Madrid, Singapore, Zurich and Sydney.

In August, Property Monitor said Dubai property price growth experienced its second-highest monthly gain of the current market cycle with a monthly gain of 2.48 per cent recorded. This is more than double the rate of growth compared to last month as well as the average monthly growth experienced year-to-date.

“A large driver behind this surge is directly related to the sheer volume of new off-plan project sales in communities that previously had few new launches or where new launches and ready property sales were typically balanced,” said Property Monitor, a part of Cavendish Maxwell group.

ALSO READ:



Next Story