Dubai Property Price Forecast 2024

A rise in rates is expected to have a variety of effects on the property market in Dubai. In the UK, a large number of people hold short-term, variable-rate mortgages. Mortgages are frequently set for an extended period duration in the US. Notwithstanding the prospect of rising interest rates in the UAE, analysts still believe that UAE residential properties would expand considerably in 2024. Furthermore, the lack of reasonable housing is going to keep to raise rents, raising the overall cost of living.

S&P Global predicted that the economy of the United Arab Emirates will grow by 2.5% this year and 2% in 2024. The UAE's population is expected to grow by 2% approximately per year. Recent increases in prices of more than 60% reflect the robust residential property market in UAE. Prices rose 6% on average in Abu Dhabi.

After experiencing one of its strongest quarters since 2010, the Dubai real estate market is already beginning to slow down. The city's property market will continue to see price hikes in the years to come. However, this increase will only be 4.5% and 3.0% in UAE property values in 2024 and 2025, respectively. Notwithstanding this, it's expected that the market will stay steady and provide investors with a trustworthy inflation hedge.

Based on recent data, the real estate market craze throughout the world has faded, and property prices will probably start to decline. It is predicted that the recent considerable price increases would be mitigated by the rise in interest rates. The average middle-class family's housing expenditures won't be much reduced by a decline in home prices, though. Due to increased costs for loans, consumer goods, and petrol, the middle class will eventually be compelled to sell their houses.

First off, Expo 2021 will be crucial in drawing tourists to Dubai.

According to official statistics, 25 million people are expected to attend the exhibition, in which 192 nations will take part. According to analysts, the economy would see a big boost if just 0.5% of those individuals decided to Invest in Dubai. Undoubtedly, the Dubai Expo will be essential in boosting the business.

Dubai's long-term visa programs and "go green" initiatives show how seriously this city intends to continue to be one of many people's preferred destinations to live for many years to come. Dubai is not only the safest city in the world with facilities that have never been seen before, but it is also beautifully pushing the boundaries with each passing year.

In conclusion, given the manner in which the administration has created beneficial initiatives that are in the best for investors, Dubai has undoubtedly made  a comeback in year 2021. It's becoming increasingly important that tourists start pouring into this stunning city for Expo 2021. Apartments in Dubai can be purchased on periodic payments, and post-handover payment arrangements with terms of 2–7 years are available to draw in investors.

Given the magnitude of the UAE real estate market during the past 20 years, the country has enjoyed significant GDP growth. Due to this, Dubai has become a financial and business center for the area, with numerous global corporations setting up shop there. The UAE property market has seen significant growth in both residential and commercial structures, as well as infrastructural initiatives like ports and airports, as a result of the demand from expats.

High-income expats who are typically lured to Gulf nations with abundant oil supply account for a significant portion of this demand. They will start seeking to invest in foreign real estate once more as the global economy grows stronger. However, instead of going back to the UAE this time, investors are looking to other Middle Eastern markets.  

Due to the expanded residential structures, investors' attention has been drawn to the expanding UAE real estate market. In 2021, the dynamics of supply and demand in the luxurious residential construction and villa markets were favorable.  Investors go into these locations as values in these particular areas rise, making the houses more alluring.

Global curiosity is still strong, but regional builders are rapidly growing their shares by profiting from inexpensive land and rent costs. However, due to the UAE's (and most Arab nations') development limits on the availability of property, developers may soon find themselves stranded with remaining inventory or unable to start fresh developments due to a scarcity of available plots.

Current Market Trends:

Increase in distant employment Because of the COVID-19 epidemic, more individuals are working remotely or looking for more flexible employment options. More individuals are now searching for homes with characteristics like home offices and strong internet access as a result of this trend, which has caused a change in the housing market. Due to the decline in demand for traditional office space as more companies permit their staff to work from home, this development has also had a substantial impact on the commercial real estate market.

The significance of environmental responsibility is rising: For many property purchasers and financiers, environmental sustainability has taken on more significance. Demand is rising for homes that employ sustainable materials, have minimal greenhouse gas emissions, and are energy efficient.

Growing e-commerce: As more individuals seek dwellings that are convenient to amenities and easier to maintain, the growing appeal of e-commerce has increased the requirement for smaller residences in metropolitan locations. In addition to increasing industrial space demand, the growth of e-commerce has led to a decline in the need for retail spaces, especially for storage and logistics activities that serve e-commerce.

Utilization of Technology: The real estate leasing market makes use of technology to increase the speed and convenience of transactions and lease agreements. For instance, we have seen a rise in the usage of augmented reality in internet-based leasing systems and property tours.

Underlying Indicators

Employment rate: The employment rate is a measurement of the proportion of the working population that currently has a job. Greater numbers of individuals who have consistent incomes and might be capable to afford to own or renting property are often associated with greater employment rates.

Interest rates: The real estate market may be significantly impacted by interest rates. High-interest rates often result in decreased demand and borrowing, whilst lower interest rates typically enhance it.

Age, income, and family size are just a few examples of demographic variables that might affect the demand for various home types. 

Supply and demand for housing: How well supply and demand are balanced can have a big influence on the market for property. While an abundance of housing might result in reduced costs, scarcity can cause costs to rise.

Buyer security: The market for property may be significantly impacted by trust among consumers. Greater investment as well as spending, notably in the sector of real estate, are frequently consequences of high levels of confidence.

Inflation: There are a number of ways that inflation might have an impact on the housing sector. While low levels of inflation might make it simpler for customers to afford real estate, large levels of inflation can result in higher borrowing rates and decreased demand.
 

The availability of water, green areas, and ideal locations are the three main variables influencing real estate values in Dubai, according to Realiste's Index. Home prices have been significantly impacted, especially for areas with an abundance filled with green space, like Dubai Hills.

According to Index's research, neighborhoods near the commercial district such as Sobha Hartland, Safa Park, Design District, and  Dubai Creek Harbor have excellent investment opportunities. The accessibility to green areas and the city's economic district, as well as the average price per square foot in these enviable places, which is lumpsum around AED 517, is another perk mentioned by the AI. These elements, together with the alluring beachfront setting, make them excellent investment possibilities.

In addition, Realiste's Index indicates that due to Dubai Hills' abundance of greenery and near access to the commercial district, the market might increase by around 10% annually over the following three years. While places like Palm Jumeirah and Blue Waters continue to be popular, their exorbitant costs may prevent further growth.

For investors, the Dubai real estate market appears attractive in 2024. Dubai continues to draw foreign investors thanks to its pro-investor laws, tax-free real estate, its advanced infrastructure, and the implementation of the Golden Visa program. In general, the future for the Dubai real estate market in 2024 seems promising for safe and lucrative possibilities for investment.