Dubai's Property Rising Prices and Rentals until 2025
Dubai's property and rental prices are expected to continue rising until 2025. Its inhabitants are increasing threefold the number of homes being built. In the first three months of the year, 26,000 residents were able to move in, but only around 6,500 new houses were built. This is leading to a rise in both rental and price prices.
Impact of the FATF Grey List Removal
In February 2024, the UAE was taken off the Financial Action Task Force's (FATF) Grey List. This increased the transparency of the country's finances and attracted foreign investment. Real estate, specifically the high-end sector, is buoyed due to the increased confidence of investors.
Strong Demand and Limited Supply
Real Estate Agents In Dubai initially believed that the price rise could slow down in the coming year. But, as demand is outpacing supply, they are now predicting the trend will continue to grow into next year.
Richard Waind, CEO of Better Homes, emphasizes that the lack of available homes is one of the significant reasons. Rents have grown by 22% over the last year because of the low supply.
Future Projections
In the meantime, as Dubai continues to expand and attract more talent, the current price trends are expected to continue through 2024 and even into 2025. It's scheduled for 2026-2027 when sufficient new properties are accessible to ease the cost pressure.
Increased Property Transactions and New Developments
Despite a 45 percent improvement in the number of units sold in the first quarter of 2024 compared to the same time the previous year, demand exceeds supply.
The surge in demand is due to high-end investors from the US and Canada, despite the fact that flows from Russia are slowing.
According to Cavendish Maxwell's Property Monitor report, the demand for properties between Dh3 and million increased by 2.6 percent in March. The demand for Dh5-10m and Dh10 million-plus properties also increased.
Developers Responding to Demand
To meet the rising demand for housing, real estate developers are starting new projects quickly, with one launched every 18 hours.
The emergence of major developments and an increasing population are expected to dramatically boost the number of homes available in the coming five years.
Record Transactions and Sales Values
Dubai witnessed a record number of 34,000 property transactions during the initial quarter of 2024. This is a 20 percent rise from the same time the previous year. Off-plan properties were the most popular, with 58% of transactions.
The total sales value increased by 25 percent, up to Dh87.8 billion. The average price of a villa in the most critical communities rose by 11% to 38%, and apartment prices increased by 7 percent to 29 percent.
Ultimately, Dubai's property market is expected to stay strong, with rental and prices rising due to an increasing population and strong demand. Its removal from the UAE from the FATF Grey List and the constant influx of foreign capital are the main factors causing this trend.
