Dubai’s premium residential real estate market is predicted to continue its strong run and surpass almost all major cities in 2024, having grown at the fastest rate among all global cities in 2023.
“Dubai has been a global leader for capital value appreciation in recent years. Prices have increased by 17.4 per cent in 2023. However, it is likely that this rate of growth will slow over the course of 2024 to around 4 to 5.9 per cent as we see a return to a more ‘normal market’”, said Jelena Cvjetkovic, director, global residential real estate consultancy Savills.
Despite slower growth, Dubai, which stands to benefit from an increase in the number of high-net-worth individuals, is projected to be the second fastest growing market in 2024, after Sydney.
Cvjetkovic pointed out that the 17.4% capital value increases were more than seven percentage points higher than the market in second place, even though growth slowed to 5.6% in the second half.
Dubai outperformed Mumbai, Bangkok, Tokyo, Sydney, Shanghai, Madrid, Barcelona, Geneva, Singapore, and other cities in terms of capital value appreciation in 2023.
The emirate continues to be a well-liked location for luxury residential real estate because of the steady influx of wealthy individuals. It is estimated that 9,500 millionaires have made Dubai their home during the last two years.
Competitively priced
In 2024, Savills projects grew in Dubai’s premium real estate market by 4 to 5.9%, Sydney’s 8 to 9.9% growth rate being the fastest.
An additional layer of uncertainty is introduced to the picture by the fact that 2024 is election year. In these circumstances, the political and economic stability that Dubai and the UAE offer will be extremely beneficial to the real estate market.
At $850 per square foot, the Dubai prime market is still affordable by global standards, according to Savills. It also has a milder climate, a comparatively simple visa application procedure, and a reasonably cheap cost of living, all of which keep drawing in both foreign and domestic buyers.
Dubai was among the top four cities in terms of growth in the prime residential rental value, behind Lisbon, Berlin, and Singapore. Rents in Dubai are still higher than in many other cities, such as Bangkok, Mumbai, Sydney, Madrid, Kuala Lumpur, Beijing, and Barcelona. Nonetheless, the rental prices are lower than those of numerous other major cities, such as Singapore, Hong Kong, Los Angeles, New York, Paris, Geneva, and Amsterdam.
“Dubai stands out as another high-yielding city by world city standards, with returns of 4.8 per cent. Prime yields here have moved in by 40 bps in the last year, during a period in which capital values rose by 17.4 per cent and rents by 8.9 per cent. We can expect to see yields move in further in Dubai this year as capital values growth is forecast to continue to outpace rent rises,” Cvjetkovic added.
Whatsapp