The Dubai real estate market is experiencing a shift as new residents are transitioning from renting to owning properties in order to avoid rising rents in the emirate. This trend is fueled by population growth and the desire for long-term stability among residents. Industry experts have noted a surge in rental transactions in new developments, with a significant portion of newly completed projects being absorbed by the rental market.
Rents in Dubai have increased by up to 31% in the first half of 2024 due to strong demand, leading to a decrease in availability of existing supply in both affordable and luxury segments. This has prompted residents, both old and new, to move to the outskirts where rents are still relatively more affordable. The trend of new residents renting initially and then transitioning to homebuying for long-term settlement is becoming increasingly common in Dubai.
With over 50,000 new residents moving to Dubai in the first half of 2024, the demand for new properties continues to outstrip the current supply in the residential market. The market is expected to remain on an upward trajectory heading into the second half of the year. Average rents have soared across most communities, with transaction volumes declining in many areas. Despite the increase in rental prices, Dubai remains an attractive option for investors due to its affordable prices compared to other luxury real estate destinations globally.
The Dubai property market rally has shown no signs of slowing down, with prices rising in most areas and strong demand witnessed across all categories. Villa prices have increased by over 41% due to heightened local and foreign demand for affordable homes in the emirate. Data from the Dubai Land Department shows a significant 38% increase in the total sales value in the first half of 2024 compared to the same period in 2023. Prices remain highly affordable, making Dubai an appealing option for new and institutional investors.
Investors are also attracted to the high rental yields offered by the Dubai property market. Locations such as Dubai Investments Park, Discovery Gardens, and Remraam are offering rental yields of up to 11%. Mid-tier apartments in areas like Dubai Sports City and Dubai Silicon Oasis are seeing rental yields surpassing 9%, while luxury apartment locations such as Green Community and Damac Hills are showing returns of up to 9%. Overall, Dubai’s real estate sector continues to be a standout choice amidst the global economic slowdown, with prices and consumer interest continuing to rise.
