As a city continually attracting a global influx of population, Dubai's new residents are increasingly shifting from renting to buying homes at a faster pace. This trend aims not only to stabilize living costs but also reflects their plans for long-term settlement in Dubai, aiming to establish stable lives and careers here.
John Lyons, Managing Director of Espace Real Estate, noted, "We have observed a clear trend where new residents typically choose to rent in their first two years upon arriving in Dubai, then often transition to buying property for business and lifestyle reasons to meet their long-term settlement needs."
Despite expectations of significant new supply in the rental market over the coming years, with 80% being apartments, demand for rental properties in Dubai remains robust, particularly in newly developed projects. These newly built properties are swiftly absorbed by the market, driven in part by Dubai's continuing population growth.
"Dubai's real estate market is showing very strong transactional data, indicating ongoing expansion across its communities. The growth in market value and transaction volumes in Dubai could continue for several years," added Espace.
In addition to the rental price surge, another prominent feature of the Dubai real estate market is the robust demand for properties. Data from Allsopp & Allsopp shows that over 50,000 new residents entered Dubai in the first half of 2024, surpassing current market supply. This phenomenon suggests that the Dubai real estate market may continue its upward trend in the foreseeable future.
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According to real estate platform Bayut, rental increases in the first half of 2024 were 15% for mid-range apartments and 7% for luxury apartments in Dubai. While some areas saw declines in apartment prices, the overall market continues to exhibit widespread rental cost increases.
For those seeking affordable accommodation, apartments in Deira and Al Nahda have become popular choices, while demand for villas is primarily concentrated in areas like Damac Hills 2 and Mirdif. In the mid-range market, apartments in Jumeirah Village Circle (JVC) and Bur Dubai remain highly sought after, with Town Square and JVC attracting buyers looking for villas.
In the luxury property segment, Dubai Marina and Business Bay continue to enjoy high popularity for apartment rentals, while Dubai Hills and Al Barsha are ideal choices for high-end villa rentals.
The Dubai real estate market has shown strong signs of rebound in the first half of 2024, with price increases in most areas, despite some expectations of slowing in the market.
Overall, the Dubai real estate market is not only driven by local demand but also continues to attract global investors due to its high rental yields and relatively affordable property prices. Haider Ali Khan, CEO of Bayut and Head of Dubizzle Group Mena, highlighted that even amidst global economic slowdowns and rising interest rates, Dubai's real estate market remains resilient, showcasing its attractiveness as an investment destination.
The long-term trend for Dubai's real estate market could persist for several years, especially with the gradual global economic recovery, further solidifying Dubai's status as a stable and prosperous destination for living and investment.
