The projected moderation in price growth this year is attributed to the increasing supply of housing units and the development of new neighborhoods in Dubai.
Industry insiders informed Arabian Business that residential real estate prices in Dubai are anticipated to experience a slowdown in growth compared to last year, attributed to increasing supply and various global economic factors.
The cooling effect on prices is projected to be more pronounced in the apartment segment, driven by the introduction of numerous new projects, resulting in a surplus of supply.
The emergence of new neighborhoods in Dubai is also anticipated to contribute to the moderation in price increases this year, prompting customers to consider advantageous offers in fresh developments.
Alois Kugendran, General Manager – Real Estate at Huspy, a Dubai-based real estate consultancy and mortgage firm, informed Arabian Business that property prices rose by around 17 percent last year and are projected to stabilize this year at approximately 5 percent growth.
He noted that the influx of additional supply into the market will contribute to this moderation in price growth, while still offering attractive value propositions that buyers in Dubai anticipate.
Kugendran emphasized that a slowdown in price escalation benefits all involved parties and property purchasers, as it establishes a robust and sustainable foundation for market expansion.
Other real estate consultancies and proptechs’ senior executives share the belief that there will likely be a moderation in the rapid increase of residential prices in Dubai this year, although they anticipate the correction to be minimal.
They noted that the current global economic conditions and political instability worldwide, particularly in Europe and the US, may temper the high growth trend in price escalation in the city.
They highlighted the UAE’s distinction as a stable and welcoming destination for both neighboring countries and the international community.
This stability, they emphasized, bolsters investor confidence, prompting them to invest and thereby supporting the continual upward trajectory of property prices in Dubai, according to Samer Chehab, founder of PropertyGuru.ae, a Dubai-based proptech that collaborates with prominent developers such as Damac, Azizi, Arada, and Shobha in off-plan sales, as reported by Arabian Business.
Dubai’s luxury property market thrives
According to insiders in the industry, although there may be a moderation in prices within the apartment segment, there will likely be a sustained increase in prices for high-end properties such as townhouses, villas, and luxury estates throughout the year.
They anticipate only a minimal correction, if any, particularly in the apartment market due to oversupply, with demand expected to remain robust. Consequently, the upward trend in prices is predicted to persist notably in townhouses, villas, and luxury properties.
Market observers also noted that the burgeoning real estate markets in Abu Dhabi and Ras Al Khaimah, which are emerging as significant hubs in the UAE, could influence Dubai’s residential real estate market, particularly in terms of price escalations.
Both Abu Dhabi and Ras Al Khaimah are experiencing heightened growth fueled by increased supply. Abu Dhabi witnessed a strong performance in 2023, while Ras Al Khaimah is witnessing heightened demand, partly due to casino and leisure developments.
Key industry figures highlighted several factors contributing to price stability, including population growth, economic steadiness, reduced interest rates, and ongoing enhancements to visa and business regulations.
Affordable segment to see highest demand growth this year
Insiders in the industry have projected that the affordable segment will see the highest transaction volume in Dubai this year, owing to its wider appeal and accessibility to a broader demographic.
Similarly, the premium and luxury segments are expected to continue experiencing significant capital gains, driven by their limited availability and sustained high demand from discerning buyers.
Factors such as exclusivity, unique amenities, and potential for higher returns on investment often influence the growth of these segments, according to Chehab.
Furthermore, developers are reported to be introducing new incentives and offers to maintain demand momentum.
Chehab noted that in addition to offering competitive payment plans, which often include a substantial portion payable post-handover, some developers are going above and beyond by absorbing registration fees. This makes the initial payment more appealing and affordable for potential buyers.
