The rally in property prices in Dubai is expected to continue in the next year as well, but there will be a slowdown in the pace of growth as compared to this year.
A growth rate of 10% has been predicted due to the strong demand seen from investors, residents and high-net-worth individuals.
According to analysts, the market will be driven by prime residential market, which include Palm Jumeirah, Downtown, Jumeirah and other high-end areas.
These have experienced an unprecedented demand after the pandemic. There are a combination of factors that have led to the rally.
These include tenants shifting to property ownership, increase in foreign fund inflows and a greater number of ready-to-move-in properties.
In addition, investors have also capitalized on the long-term residency programs that are being offered in Dubai, such as Retirement Visa, Golden Visa and Freelance Visa.
According to experts, they expect to see prices increase steadily in 2024 by about 5 to 10% due to positive market sentiment and sustained demand.
But, they also added that the pace would slow down from the 20% to 25% increases seen in property prices in 2023.
The experts also added that waterfront locations, such as Jumeirah Bay and Palm Jumeirah, along with established areas like Downtown Dubai, would continue to see higher price increases in the next year.
Moody’s Investors Service has revealed that since the second quarter of 2021, property prices in Dubai and Abu Dhabi have recorded a rise of 15%.
In addition, they expect the conditions in the UAE real estate market to remain healthy in the next 12 to 18 months, but there will be a slowdown in demand as compared to the past two years.
There will be lower price increases in upcoming areas like Mohammed bin Rashid City and Dubailand, where there are likely to be major handovers.
The continued push of the government to attract residents, tourists and investors to the city would drive job creation, positive market sentiment and boost population growth in different segments.
Experts have said that because of the favorable socio-economic positioning of Dubai and the launch of new projects by developers, global wealth would continue to be diverted to the emirate.
In addition, they believe that overall transaction volumes will also remain steady because of strong investor and owner occupier demand.
In the past decade, there has been considerable evolution of the property market and there are two types of buyers that exist.
First off, there are UAE-based residents who have seen their affordability decline because of a rise in property prices, along with interest rates and inflation.
The second type are investors, which include millionaires and high-net-worth individuals, who are supporting off-plan demand.
Some of these are based in the UAE and since they are cash buyers, they are less sensitive to rise in interest rates and inflationary pressures, as compared to buyers who use mortgage financing.
The last two years have seen a significant rise in cash buyers, due to the reputation of UAE as a safe haven.