Dubai’s real estate market remains an attractive investment destination due to expected rental and price increases driven by economic resilience, population growth, and business initiatives.
Apartment rents are projected to continue rising, while villa rents have started stabilising as buyers seek more affordable options.
Dubai’s property market has demonstrated strong resilience over the past few years and remains an attractive investment destination according to experts at ValuStrat, Allsopp&Allsopp and Betterhomes.
Factors such as population growth, infrastructure development and government initiatives are supporting continued strength, they say.
But what is in store for 2024?
Dubai apartment rents to rise in 2024
According to analysts at ValuStrat, capital values across the Emirate increased by around 20 percent in the past year alone according to their data.
Apartments saw gains of 14 percent while villas rose 23 percent annually. Prices are projected to increase further by 5-7 percent in 2024.
“Recently, the demand trend has shifted towards more affordable areas as buyers seek out lower price points and opportunities for possible future investment appreciation. These areas include Discovery Gardens, Dubai Silicon Oasis, Jumeirah Village, Business Bay, The Greens and Dubai Production City,” an analyst at ValuStrat said.
Apartments have seen gains of 14%, while villas have risen by 23% annually.
In terms of rents, residential rents surged by 27 percent YoY in Q3 2023, with an average gross yield of 8.6 percent.
“In 2024, apartment rents could continue to rise, especially for new contracts, and existing tenants might experience increases in annual renewals due to updates in the RERA rental calculator. Villa rents have begun stabilising, reaching potential price ceilings as buyers pursue more affordable options. This trend is anticipated to persist in early 2024,” the analyst added.
Arabian Business recently reported that this due to the impact of the increased demand outweighing supply in the emirate.
Expo 2020 Dubai’s ‘positive impact’ continues to lure investors
In addition to this, Dubai’s strategic location and business-friendly environment have helped cement its position as a global hub over the long-term. Its deft handling of the pandemic through restrictive measures boosted confidence.
“The positive impact of Expo 2020, albeit over 2 years back, is still prevalent in the property market, with Expo City now launched, and many events held at the site, including COP28 last year, it continues to give the country a well-deserved PR boost for investors,” Matthew Gregory, Branch Director at Betterhomes said.
Gregory added that the government’s 2040 urban master plan seeks to expand the population considerably to almost 8 million residents over the coming decades.
Dubai offers competitive rental yields, especially in key areas, and provides a high quality of life with world-class amenities and a safe, tolerant culture.
“Ongoing and planned infrastructure projects, such as Dubai Metro expansions and new developments, enhance connectivity and elevate the overall appeal of the real estate market,” he said, adding that the market continues to provide “competitive” rental yields, especially in key areas.
Gregory also highlighted Dubai’s high quality of life with world-class amenities and a safe, tolerant culture that make the emirate an attractive place to live and work, along with sustainable frameworks also align investments with global trends.
While prices have risen, property within luxury sectors stays fairly affordable compared to global cities.
“Despite recent price inflation over the last few years, the luxury real estate sector in Dubai remains relatively more affordable than in major global cities, this provides an advantageous entry point for investors looking for long-term appreciation,” Gregory said.
Dubai’s tax advantages make property investment appealing
According to Lewis Allsopp, the CEO of Allsopp & Allsopp Group, tax advantages make property investment appealing.
“You can benefit from tax free rental income and capital gains when you eventually sell the property. By simply purchasing a property and renting it out, you gain steady income from rent payments while also seeing the property appreciate in value over time,” he said, adding that the city you invest in is also important to consider.
“Targeting a city that has a steady growing market means your property is more likely to continue increasing in value at a high rate. Just as valuable is investing in an area with strong population growth projections for the next three to five years. A growing population drives higher demand for housing, keeping rental occupancy rates high. It also leads to more companies and jobs moving to the city, fuelling further population increases. This consistent population growth sustains price appreciation in the local real estate market well into the future,” Allsopp added.
For a detailed perspective on the property market, visit: Dubai - Review 2023 - 2024 Outlook