Dubai’s property market is expected to see the highest growth among major global cities this year, according to the UBS Global Real Estate Bubble Index 2024. The emirate’s score has increased from 0.14 in 2023 to 0.64 this year, with its ranking moving up from 23rd to 14th in the index. Property prices and rentals in Dubai have been on the rise for the past three and a half years, driven by an increase in population of nearly 230,000. However, analysts are cautioning against a potential short-term correction in the real estate market due to the consistent increase in prices.
The house market in Dubai was rated fair valued last year but has now elevated to the moderate bubble risk category. The Swiss bank’s annual report highlighted that excess supply and a high proportion of off-plan transactions, likely speculative, could trigger a moderate price correction in the short term. Despite this, Dubai is only recorded as having a moderate risk compared to other global cities such as Amsterdam, Sydney, and Boston. The emirate’s risk score has seen the strongest increase among all cities analyzed.
Emirates NBD Research released in September revealed that the number of transactions recorded in Dubai has reached 104,250 units in 2024, just 14,000 units short of the total transactions recorded in 2023. This reflects the massive off-plan supply launched this year. The Swiss bank’s annual study projected over 5% growth in house prices in Dubai annually for 2024. Other cities expected to see growth include Warsaw, Miami, Amsterdam, Tokyo, Vancouver, Madrid, Singapore, Zurich, and Sydney.
In August, Property Monitor reported that Dubai property price growth experienced the second-highest monthly gain of the current market cycle, with a monthly gain of 2.48%. This rate of growth is more than double compared to the previous month and the average monthly growth year-to-date. Property Monitor attributed this surge to the volume of new off-plan project sales in communities that had few new launches previously, balancing out the market between new launches and ready property sales.
Overall, Dubai’s property market is experiencing growth and attracting investors, with the potential for a moderate correction in the short term due to excess supply and speculative transactions. The emirate’s ranking in the global real estate bubble index has increased, signaling its position as a desirable market for real estate investment. With projected growth in house prices and high transaction volumes, Dubai remains a favorable destination for property buyers and investors looking for opportunities in a thriving real estate market.
