Dubai property market - What to expect in 2024 - according to Valustrat
The Dubai real estate market is poised for a transformative phase, marked by a resurgence in the apartment sector and moderated growth in villas, a ValuStrat report indicates. The likelihood of lower mortgage rates is set to propel renters towards homeownership, as rent hikes outpace property value increases. The forthcoming Dubai Metro Blue Line is anticipated to boost demand in areas benefiting from enhanced connectivity.
Rising apartment rents, particularly for new leases, and higher renewal costs due to RERA rental calculator adjustments, are on the horizon. Conversely, villa rents are nearing their peak, prompting a shift towards more economical housing options, a trend expected to continue into early 2024.
Investors and buyers should stay informed, especially considering government initiatives like expatriate retiree visas, the Green visa, and the extended 10-year Golden visa scheme, aiming to attract foreign professionals and bolster the real estate market.
Forecasting a 4-4.5% economic growth in 2024, primarily in non-oil sectors, Dubai’s real estate is expected to witness steady, albeit moderate, growth, with potential price adjustments. The first half of 2023 saw increased demand for larger homes in prime locations, shifting recently towards more affordable areas as buyers seek better value and investment potential.
This upward trend is attributed to government policies like visa schemes and post-pandemic business expansions. Office space demand, particularly in DIFC and Downtown Dubai, is expected to remain strong in 2024, with slower growth in capital values.
In 2023, Dubai's real estate market outperformed pre-pandemic levels. The residential market experienced significant capital value growth, with the ValuStrat Price Index indicating a 19.9% year-over-year increase in Q4 2023. Villa values rose more rapidly than apartments, and office values saw the highest annual increase since 2015. Hotel and tourism sectors also rebounded, and retail sales grew, albeit with a shift towards online channels.