Dubai’s real estate market is poised for growth in the third quarter, driven by two key factors: the availability of financing and a steady increase in population. These factors play a significant role in shaping property prices, attracting potential buyers, and stimulating demand.
In the current market climate, the accessibility of financing takes center stage, surpassing its usual importance. As rental prices surge, many tenants are considering homeownership as a viable option. While global increases in interest rates have impacted real estate markets worldwide, Dubai has remained relatively insulated due to its political stability and government regulations. These factors instil confidence in prospective investors and buyers, ensuring a steady flow of interest in the Dubai real estate market. This stability comes as no surprise, given that Dubai’s economy relies heavily on tourism and real estate, with business and political policies from the ruling families serving as key drivers of confidence for both new and existing buyers.
Population growth is another significant factor driving the market. Dubai has experienced consistent population growth year after year, directly influencing supply and demand dynamics. As of July 2023, the Dubai Statistics Center reports a population of 3,604,030, with an increase of 88,766 individuals in the past 12 months alone. This surge in population has fuelled demand for properties, resulting in a natural increase in prices. To accommodate this trend, Dubai has unveiled plans to expand public beaches by 40% and allocate 60% of the city’s land to nature reserves. These measures aim to ensure the sustainability of Dubai as a leading emirate and support the growing population influx through infrastructure growth plans.
Dubai’s appeal to international companies further strengthens the real estate market. Its prime location provides access to emerging markets in the Middle East and Asia, supported by world-renowned infrastructure and favourable tax policies. As a result, demand for residential and commercial properties continues to rise, driven by international companies seeking to establish their presence in the region.
With accessible financing options and a growing population, Dubai’s real estate market remains robust and poised for further expansion in the third quarter. The city’s blend of economic stability, population growth, and international appeal solidifies its position as a vibrant and thriving real estate destination.
Analysing price trends in Dubai’s real estate market, there are distinct patterns in price changes for apartments and villas/townhouses. Certain areas have experienced significant growth, while established regions have also seen price increases.
Dubai Production City stands out as the top-performing area, with a remarkable 23% price change over the last three months, reaching Dh744 per square foot (sq.ft). Living Legends closely follows with a growth rate of 21%, reaching Dh697/sq.ft. While these areas demonstrate the most substantial percentage increase, it’s worth noting that well-established regions have also experienced price growth. Al Habtoor City, for instance, saw a 13% increase, with prices reaching Dh2,058/sq.ft, while Bluewater’s Islands experienced a 10% growth, reaching Dh4,044/sq.ft.
Interestingly, apartments have shown higher price changes compared to villas and townhouses in the past three months. The highest price change for villas/townhouses was observed in Jumeirah Islands, recording a 13% increase, reaching Dh2,006/sq.ft. Despite these price fluctuations, transaction activity has remained strong. According to the Dubai Land Department, total sales transactions in Dubai rose by 57% in Q2 2023 compared to the same period last year.
These dynamic price trends in Dubai’s real estate market reflect the diversity of opportunities for both buyers and investors. While certain areas experience rapid growth, established regions continue to offer lucrative investment options. The overall market remains vibrant, driven by robust transaction activity and the allure of luxury properties attracting high-net-worth individuals.
Original article reference: ZAWYA.