The real estate market in Dubai has exhibited strong resilience over the past few years, making it a focal point for global investors and remaining an attractive investment destination. This is primarily due to factors such as population growth, infrastructure development, and government initiatives supporting the economy.
According to analyses by ValuStrat, Allsopp & Allsopp, and Betterhomes, Dubai's real estate market continued its robust growth trend in 2020, influenced by the Dubai Expo. Population growth, ongoing infrastructure projects, and proactive government measures have played crucial roles in stabilizing and developing the market.
ValuStrat's data indicates that the capital value across the emirate increased by approximately 20% in just the last year. Apartment prices rose by 14% annually, while villa prices increased by 23% annually. It is anticipated that prices will further rise by 5-7% by 2024.
Moreover, residential rents in the region are also showing a strong upward trend. In the third quarter of 2023, residential rents surged by 27% year-on-year, achieving an average gross yield of 8.6%. Apartment rents are expected to continue rising by 2024, particularly for new contracts, while villa rents have started to stabilize.
In recent years, the demand trend in Dubai has shifted towards more affordable areas such as Discovery Gardens, Dubai Silicon Oasis, Jumeirah Village, Business Bay, The Greens, and Dubai Production City. These areas have attracted buyers seeking lower price points and potential future investment appreciation.
Dubai's strategic location and business-friendly environment contribute to consolidating its position as a long-term global hub. Meanwhile, government measures to address the pandemic and boost market confidence have further uplifted market sentiment.
The impact of the Dubai Expo remains widespread in the real estate market. Expo City is underway and has hosted various events, including COP28 last year. These activities continue to have a positive impact on the country, boosting investor confidence.
Dubai's high-quality lifestyle, world-class amenities, safety, and tolerant culture make it an attractive place to live and work. Tax incentives in Dubai also enhance the attractiveness of real estate investments, allowing investors to benefit from tax-free rental income and capital gains. Furthermore, Dubai's luxury real estate industry remains relatively affordable compared to major global cities, providing favorable entry points for investors seeking long-term appreciation.
Dubai's municipal government's 2040 Urban Master Plan aims to significantly increase the population to nearly 8 million. Ongoing and planned infrastructure projects, such as the Dubai Metro expansion and new developments, enhance connectivity and overall attractiveness of the real estate market. Sustained population growth will drive an increase in housing demand, attract more companies and job opportunities to Dubai, further boosting population growth, and maintaining upward pressure on local real estate prices.
