Since 2020, Dubai’s real estate market has seen a significant recovery, fueled by strong demand and population growth.
After a seven-year price correction, the market began rebounding in 2021, with transaction volumes reaching all-time highs each year.
Prices increased by 17% over the past year and are now 40% higher than in 2020.
Despite this surge, rental growth has outpaced price growth, maintaining attractive rental yields of 6-7%.
Household incomes have grown rapidly, surpassing all other major cities, and cash buyers have buffered the market from the effects of rising interest rates.
However, the off-plan sales speculative demand increased and the luxury market segment appears overvalued. The combination of high prices and speculative buying may lead to price corrections in the near future.
Long-term risks to Dubai’s real estate market include an economic recession and a drop in oil prices, which could weaken demand.
Additionally, supply is expanding rapidly, with the housing stock projected to grow by a third by 2029.
While the market has been robust, the relentless increase in supply raises concerns about long-term price appreciation.
Overall, while Dubai’s real estate remains strong for now, potential risks could trigger instability in the coming years.
You want to know more? Below my contact details
Phone +971553523125
Email info@alessandroderubertis.com
Source: 2024 UBS Global Real Estate Market repot