The Dubai property market capped off an exceptional 2023 with total sales hitting an all-time high of over AED407 billion, representing year-on-year growth of 56 percent.
As the emirate enters the new year, leading residential agency Allsopp & Allsopp is forecasting further strength across the sector, as per their Dubai Property Market report.
Chairman Lewis Allsopp, who has over two decades of experience in Dubai real estate, predicts average sales prices will increase 6-10 percent in 2024.
“Looking ahead to 2024 at the renewed opportunities and positive outlook for buyers and investors looking to enter the market leveraging favourable interest rates. Attractive borrowing conditions are already starting to appear within the market at the time of writing. As a result, we expect a direct increase in residential sales transaction volume, renewed investor interest, and a stronger focus on homeownership for first-time buyers,” he said.
Allsopp believes improved mortgage affordability will drive greater demand, boosting transaction volume.
Smaller monthly repayments mean buying becomes an attractive proposition compared to renting, Allsopp explained, adding that this in turn will provide buyers with higher purchasing power to meet deposit requirements on properties priced from AED2-5 million. These mid-market homes are set to see brisk activity as first-time purchasers are lured into the market.
Investors are also anticipated to reap the benefits of lower financing costs. As a result, he expects renewed flows of capital into Dubai real estate. Luxury homes above AED10 million are tipped to see above-average capital appreciation, bolstered by limited new supply in the city’s most prestigious locales, he added.
Palm Jumeirah tops sales in 2023
In 2023, Palm Jumeirah retained its position as the top location for sales over this budget, with 168 transactions.
Other high-end communities surpassing 30 deals included Mohammed Bin Rashid City, Tilal Al Ghaf, and Jumeirah Bay Island.
With prices edging closer to equilibrium after multi-year climbs, transaction numbers are forecast to rise in kind.
The secondary market looks particularly attractive to value-conscious investors and owner-occupiers. Allsopp noted the premium for off-plan properties is shrinking, reflecting their trend towards maturity in certain areas.
“With the pricing gap between ready, secondary homes, and off-plan properties becoming smaller, buyers/investors will see greater returns and short-term opportunities within the secondary market, leading to potential demand across all price brackets,” he said.
On the renting front, rental yields remain robust for landlords. While double-digit hikes cannot be ruled out, some tenants may secure relief via staggered payments, especially as space emerges in newer communities.
One sector with scant suitable supply is commercial real estate. Allsopp predicted both prices and rents will climb 10-15 percent for Grade A offices, underpinned by over 90 percent occupancy and steady corporate expansion in the emirate.
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