After a year of notable growth estimated to be in the range of 23–30 percent, rents in upscale residential areas of Dubai are expected to see an increase of up to 20 percent in 2024.
Property experts anticipate the continued buoyancy for many reasons, such as the city’s growing appeal as a haven for the wealthy, the increased appetite of investors, the influx of professionals, and the population surge.
They stated that rental prices will continue to rise if net migration to Dubai stays higher than the rate at which new homes are being given away. The trend of rents in 2024 may be determined by factors such as an increasing number of people choosing to buy instead of rent, and the increasing demand for real estate as an appealing investment opportunity.
Ilnara Muzafyarova, head of Colife, a real estate management company, says that after a sharp increase in rental prices by 23 percent annually in the first half of 2023 and a year-end projection of roughly 30 percent, the upward trend appears strong. Muzafyarova projected that short-term rentals (up to six months) would increase by 20% from 2023, while long-term rentals (more than six months) would increase by 15%. This is supported by the market’s natural expansion, which has also seen an increase in apartment prices of 15% between mid-2022 and mid-2023.
S&P predicted in November 2023 that home prices would rise by 5.0% to 7.0% in 2024. According to Tatiana Leskova, associate director of Corporate Ratings at S&P, there isn’t any proof that Dubai’s property market is slowing down this year.
According to analysts at real estate consulting firm CBRE, during January 2020, rents in Dubai have increased by about 42%, while home prices have increased by about 33%. Similar trends have also been seen in villa rentals, which now average $88,400 annually after increasing by 19.2% in November alone.
According to experts, Dubai’s real estate market is thriving, as evidenced by the rising momentum in rents, property values rising in combination with the construction of new high-rise buildings, and a sharp increase in property transactions.
Colife, the owner of a one-bedroom apartment in Dubai Marina, saw a significant increase in monthly income over the previous year of 21.2%, to $2,970. According to Colife, owners should expect even larger returns in the neighborhood of $3,415 per month in 2024.
Real estate experts predict a steady demand for residential space in Dubai due to the city’s growing population and ongoing influx of international professionals.
The third quarter saw a gradual moderation in the growth rate of the Dubai rental market, according to real estate consultancy Asteco. With rental increases for apartments, villas, and offices of 3.0 percent, 2.0 percent, and 4.0 percent over the three months, there has been a noticeable slowdown. According to Asteco, the changes were 18%, 19%, and 29% on an annual basis, respectively.
According to Property Finder’s November data, demand is greatest for one-bedroom apartments. It was discovered that about 36% of respondents searched for one-bedroom apartments, 30% for two-bedroom apartments, and 24% for studio apartments. Three-bedroom villas or townhouses were sought after by 42% of buyers, while larger properties with four bedrooms were preferred by 35%. Sixty-six percent of tenants preferred furnished apartments, while thirty-two percent wanted unfurnished. Of those looking for villas or townhouses, 51% found unfurnished listings and 48% found furnished ones.
The Dubai Statistical Centre estimates that as of July 2023, 3,604,030 people were living in Dubai, up from 3,515,264 in July 2022. The Development Master Plan for Dubai projects that by 2040, there will be 5.8 million people living in the city.