Market trends impacting real estate in Dubai and the UAE
Dubai’s real estate sector maintained its robust growth trajectory into the first quarter of 2024. The market saw a surge in new developments, alongside rising prices for both residential and commercial properties, and a concurrent increase in rental rates. Dubai’s appeal to international investors and residents remains strong, driven by its advanced infrastructure, technological advancements, favorable visa and tax regulations, and a pro-business climate. This influx of newcomers fuels the ongoing demand for housing. We will now explore the anticipated trends for Dubai’s real estate market in the year ahead.
The biggest trends to watch out for in Dubai real estate in 2024.
In Q1 2024, Dubai’s property market is showing a continuation of 2023’s dominant trends. These include a wave of new developments coinciding with consistently high demand, a growing preference for luxury homes among buyers, rising purchase and rental costs across the board, a focus on eco-friendly and sustainable building practices, and the adoption of advanced technologies and innovations in the industry.
High demand for Luxury homes
Dubai’s population experienced significant growth in 2023, adding approximately 100,000 residents, as reported by the Dubai Statistics Center. This population increase has fueled the already strong demand for housing. Transaction activity in 2023 reached unprecedented levels, exceeding 133,000—a threefold increase compared to the prior year.
Dubai’s population is projected to continue to grow in the near future. This growth, coupled with a significant increase in rental prices, is driving many expatriates to purchase homes rather than rent them. This preference for buying homes rather than renting is expected to continue into 2024 and beyond.
Growth in the real estate value
Throughout 2023, the value of properties, both those under construction and those already completed, saw growth across all market segments, including affordable, mid-range, and premium housing. Specialists in the field forecast that this upward trend in prices will persist into 2024, with expected increases averaging between 5% and 7%.
According to Muhammad Binghatti, CEO of Binghatti, one of the biggest development firms in the United Arab Emirates, real estate prices in 2024 could increase by as much as 12–14%. This is attributed to the influx of affluent individuals into the emirate, the expected decline in mortgage interest rates, and further population growth.
Boom in the luxury housing segment
Dubai attracted a large number of high-net-worth individuals from 2022 to 2023, becoming a leading global city for the affluent. This influx created a substantial imbalance in the luxury real estate market, with demand dramatically surpassing the available inventory. Desirable neighbourhoods for millionaires included Downtown Dubai, Dubai Marina, and Palm Jumeirah.
The luxury real estate market in Dubai is poised for continued growth in 2024, driven by the city’s ability to attract affluent global citizens. This anticipated growth points to ongoing collaborations with world-class brands in fashion, automotive, and hospitality. Dubai’s leading position in the branded residences sector in 2023 sets the stage for a projected doubling of these units by 2030.
Growth in supply in the secondary real estate market
Innovation and digitization in the real estate industry
Principles of sustainability
As residential buildings are responsible for a substantial portion (approximately 33%) of worldwide CO2 emissions, developers are increasingly focused on reducing their environmental impact. The trend of sustainability is expected to continue leading the industry in the years ahead. It is becoming standard practice for new projects to integrate sources of renewable power, environmentally conscious technologies, and the like.