The Dubai real estate market has witnessed tremendous growth and demand, achieving record-breaking numbers last year. This upward trend is anticipated to continue, with experts asserting that there is no ideal month or season to purchase property.
“With demand exceeding supply, there’s no ideal month or season to buy. We encourage our clients to be ready to act when their desired opportunity becomes available,” said Luke Remington, Managing Director, haus&haus in an exclusive interview with Arabian Business.
Despite global economic uncertainties, Dubai’s property market is forecast to rise 5-7 percent in 2024, driven by its safe-haven status, tax-friendly environment, and growing population.
As for emerging trends this year, Remington believes that there will be a resurgence of the Chinese market. “Due to the lockdowns and restrictions, we saw a massive pullback from the Chinese, but I imagine we’ll see many Chinese return to the UAE market,” he said.
Prospective investors eyeing any property market, including Dubai, should take into account diverse factors, including economic conditions, market trends, and other elements that impact the real estate sector.
Economic factors to watch:
- Interest rates: Lower rates, potentially due to FED cuts followed by the UAE Central Bank, could make property purchases more accessible.
- Infrastructure developments: New metro lines and other projects can significantly enhance property values in specific areas.
- Seasonality: Traditionally slow summer months might not hold true in 2024 due to high demand. Be prepared to act quickly when opportunities arise.
Emerging trends:
- Resurgence of Chinese buyers: Relaxed travel restrictions could bring back Chinese investors.
- Expo City: Existing infrastructure and sustainability features make it a prime investment destination.
- Secondary market boom: Renovated properties in established communities like Arabian Ranches are attracting premium buyers.
- Demand shift beyond central areas: Higher-end developments in Jumeirah Village Circle (JVC) and Arjan cater to buyers seeking affordability with growth potential.
- Rent hikes continue: Limited inventory pushes rents 10-20 percent higher, benefiting landlords (average returns exceeding 6.5 percent). Tenants may opt for short-term leases for flexibility.
In addition to the expected influx of Chinese investors, Expo City residential projects are poised to attract growing interest, fueled by factors like the presence of a metro station and sustainable features.
“The infrastructure that already exists, including a metro station, and sustainable features, make it extremely attractive compared to other new community developments,” Remington said.
In the realm of secondary sales, areas labeled as “hotspots,” such as Arabian Ranches and Emirates Living, consistently experience demand surpassing the available supply. This situation has proven advantageous for homeowners, enabling them to renovate outdated properties and resell them at higher prices.
Due to increased demand, “buyers are being forced to consider properties further afield.” Developers are proactively addressing this trend by constructing upscale properties in previously considered “affordable” areas like JVC and Arjan. It is anticipated that property values in these areas will witness an upward trajectory.
The increase in demand outweighing supply continues to impact the property market with rents expected to further increase 10 to 20 percent in 2024. “Whilst tenants may have been hoping for a reprieve from increasing rents in 2024, available inventory is still a massive issue due to lower than expected property handovers in 2023,” Remington said.
According to experts, this is a investor and landlord market with average returns in the excess of 6.5 percent.
“Although, this also means tenants with existing contract will likely renew their tenancies rather than move. So there may be a shift in mindset for landlords moving to holiday/short term leasing which offers more flexibility,” he explained.
Dubai property market: Phenomenal growth
Buyers commonly worry of having “missed the boat” when it comes to making property investments, however, “There is no doubt that the recent growth in the Dubai property market really has been phenomenal, but when you look at it in perspective against other big cities like New York, London and Hong Kong, the cost of properties in Dubai is still offering owners and investors great value for money.”
This year, the trend of demand surpassing supply is expected to continue which leaves buyers with the need to incorporate a competitive mindset and “be ready to act quickly and be willing to pay a premium if they are looking for something in a very specific area.”
However, for those who are more flexible, Remington assures that there are “lots of great deals available and in good value.”
Off-plan in 2024
The momentum for off-plan projects is poised to maintain an upward trajectory with several developments underway across the city. The demand is expected to escalate as “residents are seeing themselves settle in Dubai for the long term and are willing to wait for their perfect home in a new community.”
Moreover, the commercial sector is anticipated to be a focal point in 2024.
“In 2023 commercial property experienced a surge and we are expecting continued substantial growth as more companies see the benefits that the city has to offer,” Remington concluded.
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