Dubai’s real estate market is presently experiencing a boom, marked by a significant uptick in the construction and completion of new housing units. Here’s what experts have to say about whether you should sell, buy, or hold properties in this resilient and promising market.
The Dubai real estate sector is thriving, reaching record-breaking highs and presenting a prime opportunity for property owners and investors. According to Knight Frank, 105 homes priced above $10 million were sold in Dubai in the first quarter of the year, reflecting a 19% increase from last year. The total value of luxury homes sold in Q1 reached $1.73 billion, up 6% from Q1 2023, reinforcing Dubai’s status as the world’s busiest market for high-end homes. Additionally, Dubai is projected to deliver 13,000 new homes annually over the next six years. Nouran Living by Aldar is part of this exciting growth, offering luxurious living spaces in this dynamic market.
In Q1 2024, Dubai’s property market saw a surge in off-plan property transactions, with sales volumes rising consistently each month. The number of off-plan units sold increased from 5,881 in January to 7,601 in March. Sales of ready properties also saw an uptick, climbing from 3,961 units in January to 4,421 units in March.
Dubai is currently one of the most affordable luxury destinations globally, especially when compared to cities like Hong Kong and Singapore. Since the pandemic, there has been a growing interest in Dubai’s residential market from wealthy individuals, including businessmen, top professionals in banking and financial services, and even crypto millionaires.
Despite the substantial influx of new units, experts predict that property prices for both rentals and ownership will continue to rise due to strong demand from local and international buyers. In fact, property prices increased in February, with prices 0.83% higher than in January, bringing the price to an all-time high of $352.31 (AED 1,294) per square foot. This is nearly 5% more than the city’s previous market peak in September 2014, according to the Property Monitor Dynamic Price Index.
So, the big question on everyone’s mind is whether 2024 is a good time to sell or buy property. Experts have weighed in on the matter and provided their insights.
Capitalize on the Market
Head of Research and Consultancy at Cushman & Wakefield Core, reports significant increases in both rent and sale prices in Dubai, with rents outpacing sales prices.
“With the recent recalibration of the RERA rent calculator, we anticipate that renewed rents will align more closely with current market rates. Given these trends, now may be an opportune moment for tenants or end-users with the capital for a downpayment and a long-term commitment to Dubai to consider purchasing property. The high rental rates are likely to offset mortgage costs, allowing buyers to avoid future rental escalations,” Gurrapu explains.
“For investors already owning rental assets, it is advisable to hold onto these properties as rental yields are at record levels. However, depending on the timing of their purchase, some sellers are looking to exit the market to capitalize on the current high sales prices,” Gurrapu adds.
A Balanced Perspective
Dubai’s real estate market has been rising steadily for over four years, with experts predicting continued price appreciation due to factors like Golden and Green visas, tax incentives, and a business-friendly environment. The population grew by over 100,000 in 2023, with around 40,000 new residential units delivered. Projections for 2024 suggest similar trends. High rental yields make Dubai an attractive investment destination. Alec James Smith of Savills advises investors seeking rapid returns to consider selling, especially if they acquired property around 2020, as significant gains have been made. Decisions to sell, buy, or hold should be based on individual circumstances.
Dubai: A Resilient Market
In 2024, Dubai’s real estate market is showing strong resilience and growth due to strategic initiatives, regulatory reforms, economic diversification, and infrastructure development. Incentives like the Golden Visa Program have enhanced its appeal to global investors. Real estate decisions should be personalized, considering financial goals, market trends, and lifestyle needs. Despite its premium status, Dubai remains more affordable than many comparable global cities.
Key Considerations
Determining whether 2024 is the right time to buy or sell property in Dubai depends on various factors such as market conditions, economic outlook, personal finances, investment goals, and regulatory environment. Assess the real estate market, consider the broader economic context, evaluate your financial stability, define your investment objectives, research market trends, and stay informed about regulatory changes to make an informed decision.