Dubai’s prime residential property market grew at the fastest pace among all the global cities in 2023 and will continue its strong run in 2024, outperforming almost all the major cities yet again.
“Dubai has been a global leader for capital value appreciation in recent years. Prices have increased by 17.4 per cent in 2023. However, it is likely that this rate of growth will slow over the course of 2024 to around 4 to 5.9 per cent as we see a return to a more ‘normal market’”, said Jelena Cvjetkovic, director, global residential real estate consultancy Savills.
Despite slower growth, Dubai will be the second fastest growing market in 2024 after Sydney, benefitting from increases in their high-net-worth populations.
Cvjetkovic added that 17.4 per cent capital value increases were more than seven percentage points ahead of the second-place market, though the rate of growth slowed to 5.6 per cent in the second half.
In 2023, Dubai outpaced Mumbai, Bangkok, Tokyo, Sydney, Shanghai, Madrid, Barcelona, Geneva, Singapore and other cities in terms of capital value appreciation.
The emirate continues to be a hotspot for prime residential property as a large number of high-net-worth individuals continue to flock to the emirate. It is estimated that around 9,500 millionaires made Dubai their home in the past two years.
Competitively priced
In 2024, Savills projects grew between 4 to 5.9 per cent in Dubai’s prime property segment, second fastest after Sydney’s 8 to 9.9 per cent.
2024 is the year of elections, adding a layer of uncertainty to the outlook. In these circumstances, the economic and political stability offered by Dubai and the UAE will prove a boon for the real estate market.
Savills said the Dubai prime market is still relatively competitively priced by global standards, at $850 per square foot, offers a comparatively low cost of living, a relatively easy visa process, and a warmer climate which continues to attract international and domestic buyers.
The cost of buying, owning and selling a $2 million property in Dubai is also cheaper than in Singapore, Hong Kong, London, New York, Tokyo, Paris, Mumbai and other cities.
In terms of prime residential rental value growth, Dubai was among the top four cities after Lisbon, Berlin and Singapore. Rents in Dubai are still higher than in Bangkok, Mumbai, Sydney, Madrid, Kuala Lumpur, Beijing, Barcelona and many other cities. But rents are lower than in New York, Hong Kong, Los Angeles, Singapore, Paris, Geneva, Amsterdam and numerous other major cities.
“Dubai stands out as another high-yielding city by world city standards, with returns of 4.8 per cent. Prime yields here have moved in by 40 bps in the last year, during a period in which capital values rose by 17.4 per cent and rents by 8.9 per cent. We can expect to see yields move in further in Dubai this year as capital values growth is forecast to continue to outpace rent rises,” Cvjetkovic added.