According to a report by S&P Global, Dubai's real estate market is expected to experience growth of 5% to 7% next year. This suggests a slowing down of the rate of price increase, with a potential slight reversal.
Nevertheless, analysts believe that the market will not experience significant turmoil, and property prices are not expected to decline by more than 5% to 10%.
The report indicates that villa prices have already surpassed previous peak levels, while apartment prices are 10% to 20% lower than the peak. This is primarily due to an oversupply situation in recent years.
However, despite the price decline, Dubai's real estate market remains attractive.
Dubai's real estate market has defied global trends, rising at a double-digit pace each year since 2021. This is attributed to the demand for high-quality properties from foreign investors, including high-net-worth individuals.
Moreover, Dubai's economic diversification is one of the reasons for the sustained prosperity of its real estate market.
Despite a sluggish global economy, Dubai's economy has performed well and is relatively unaffected by external pressures. It is forecasted that Dubai's average economic growth rate will reach 3%, and the government's fiscal position may strengthen.
Additionally, industries such as hospitality, wholesale and retail, and financial services are expected to continue their strong growth momentum.
However, analysts also point out that with the ongoing rise in real estate prices, the risk of cyclical reversal is increasing. They anticipate a slowdown in pre-sales volumes next year but expect them to remain at a healthy level.
Developers may adjust their products based on demand, introducing more high-quality properties and smaller units. This contrasts sharply with the trend of preferring larger properties due to pandemic restrictions in the past.
Dubai's population has grown by over 2% in the past year, reaching 3.6 million people. International tourist numbers are also steadily recovering, with over 41 million passengers passing through Dubai International Airport in the first half of 2023. This indicates an increasing appeal of Dubai as a tourist destination.
