In 2024, rents in prime residential areas of Dubai are expected to rise by 20% after a year of a remarkable rise that was estimated to be in the range of 20% and 30%.
Multiple reasons have been cited by property experts for the sustained buoyancy, which include surge in population, increasing influx of professionals, higher investor appetite and growing appeal of the city as a haven for the rich.
According to experts, if the migration to Dubai continues to happen at a higher rate than that of new homes delivered, rental prices would continue to experience upward pressure.
In 2024, there are various factors that could determine the trajectory of rents, which include a greater number of residents opting to purchase rather than rent their homes.
In addition, the appeal of property as an attractive investment opportunity is also on the rise, which is likely to drive up rents.
The first half of 2023 saw a 23% rise in rental prices and year-end projection of 30% has already been made. This shows that there is a strong upward trend.
Short-term rentals are predicted to rise by 20% as compared to last year. These are for six months. Meanwhile, long-term rentals that are above six months, are expected to increase by 15%.
The market has seen organic growth, which resulted in a rise in apartment prices of 15% from mid-2022 to mid-2023.
S&P had predicted in November 2023 that house prices would rise by 5% to 7% in 2024. It also said that real estate prices in Dubai did not show any signs of slowdown.
Analysts at CBRE, the real estate consultancy company, said that there has been a 42% increase in rents in Dubai since January 2020, while a 33% rise has been recorded in house prices.
There has been a similar trend seen in villa prices, as they reached $88,400 per year, while average rent in November rose by 19.2%.
According to experts, the upward momentum recorded in rents is a reflection of the vibrancy of the real estate market in Dubai.
The property values have escalated, along with operational high-rise buildings and there has also been a surge in property transactions.
Monthly income recorded a 21.2% increase for the owner of a one-bedroom apartment in Dubai Marina, which rose to $2,970.
In the future, owners can generate even high returns in 2024, which are expected to be $3,415 per month.
According to realty experts, there is likely to be a sustained demand for residential space in the emirate. This is if population growth continues and if global professionals continue to come in.
Asteco, the real estate consultancy, said that the growth rate in Dubai’s rental market had recorded a gradual moderation in the third quarter of 2023.
It said that the slowdown was evident as rental gains for apartments stood at 3%, villas at 2% and offices at 4% for a period of three months.
On an annual basis, these changes were 18%, 19% and 29%, respectively.