Despite a more moderate pace of expansion, Dubai is anticipated to secure the position as the second-fastest-growing market in 2024, following Sydney.
In 2023, Dubai’s prime residential property market experienced the swiftest growth globally, a trend expected to persist into 2024, surpassing the performance of most major cities once again.
“Dubai has consistently led in capital value appreciation. Prices surged by 17.4% in 2023. However, it is anticipated that this growth rate will ease in 2024, stabilizing at approximately 4 to 5.9%, indicating a return to a more ‘normal market’,” stated Jelena Cvjetkovic, director at the global residential real estate consultancy Savills.
Despite a slowdown, Dubai is poised to be the second-fastest-growing market in 2024, following Sydney, benefiting from an increase in their high-net-worth populations.
Cvjetkovic mentioned that the capital value in Dubai increased by 17.4 percent, surpassing the second-place market by over seven percentage points, although the growth rate slowed to 5.6 percent in the latter half of the year.
In 2023, Dubai exceeded other cities, including Mumbai, Bangkok, Tokyo, Sydney, Shanghai, Madrid, Barcelona, Geneva, and Singapore, in terms of capital value appreciation.
Dubai remains a sought-after location for prime residential property, attracting a significant number of high-net-worth individuals. Approximately 9,500 millionaires are estimated to have chosen Dubai as their home in the past two years.
COMPETITIVELY PRICED
In 2024, Savills forecasts a growth ranging from 4 to 5.9 percent in Dubai’s prime property sector, making it the second fastest-growing market after Sydney, which is expected to grow between 8 to 9.9 percent.
The upcoming elections in 2024 introduce an element of uncertainty to the outlook. Nevertheless, the economic and political stability provided by Dubai and the UAE is anticipated to benefit the real estate market.
Savills emphasizes that Dubai’s prime property market remains competitively priced globally at $850 per square foot. It also boasts a relatively low cost of living, an uncomplicated visa process, and an appealing warm climate, attracting both international and domestic buyers.
The expenses associated with purchasing, owning, and selling a $2 million property in Dubai are also more economical compared to Singapore, Hong Kong, London, New York, Tokyo, Paris, Mumbai, and other cities.
Concerning the growth in prime residential rental values, Dubai ranks among the top four cities, following Lisbon, Berlin, and Singapore. While rents in Dubai surpass those in Bangkok, Mumbai, Sydney, Madrid, Kuala Lumpur, Beijing, and Barcelona, they are lower than in New York, Hong Kong, Los Angeles, Singapore, Paris, Geneva, Amsterdam, and various other major cities.
“Dubai emerges as a high-yielding city by global standards, with returns reaching 4.8 percent. Prime yields have increased by 40 basis points in the past year, coinciding with a 17.4 percent rise in capital values and an 8.9 percent increase in rents. Anticipated continued growth in capital values is expected to outpace rent increases, leading to further improvement in yields,” added Cvjetkovic.
