Trends in the real estate market in Dubai and the UAE

In Q1 2024, the real estate market in Dubai continues to put on a strong performance; many new projects are being launched, the cost of residential and commercial properties is growing and rental rates are increasing. Thanks to high-quality infrastructure, innovative technology, comprehensive visa and tax policies and a comfortable business environment, the emirate attracts a steady stream of foreigners. This, in turn, increases the demand for housing. Let’s take a look at what the Dubai real estate market is expecting this year.

As of Q1 2024, the Dubai real estate market continues to follow the main trends prevalent in 2023. These include an onslaught of newly released projects amidst consistently high demand, increased buyer interest in luxury housing, rising purchase and rental costs for all types of real estate, a focus on sustainability and eco-friendly development and the introduction of advanced technologies and innovations into the industry.

High demand for homes

According to the Dubai Statistics Center, the population of the emirate increased by about 100,000 in 2023 alone. This influx contributes to the ongoing high demand for housing in the area. The year 2023 saw the highest number of transactions ever — with over 133,000 in all – triple the previous year’s figures.

The number of residents in Dubai is expected to steadily increase in the coming years. In addition, due to record spikes in rental costs, many foreigners who used to rent their homes have now decided to buy their own. Therefore, the growing trend of buying property rather than renting it will continue in 2024.

Growth in real estate value

In 2023, the value of under construction and finished real estate in all segments – affordable, mid-range and premium – increased. According to the experts, prices will continue to rise in 2024 by an average of 5-7%.

Muhammad Binghatti, CEO of one of the UAE’s largest development companies, Binghatti, predicts that the surge in property costs in 2024 may reach as high as 12-14%. This is attributed to further population growth, the expected decline in mortgage interest rates and the influx of wealthy people to the emirate.

Boom in the luxury housing segment

Between 2022 and 2023, Dubai became one of the world’s most popular cities for high-net-worth individuals. The influx of the world’s wealthiest has been a key reason for the unprecedented demand for premium segment real estate, which has utterly outstripped supply. The most popular choice of neighbourhoods for millionaires include Downtown Dubai, Dubai Marina and Palm Jumeirah.

The demand for exclusive luxury real estate is expected to continue into 2024 as Dubai successfully attracts the world’s elite. Therefore, there are still many collaborations with globally-renowned fashion, automotive and hospitality brands to come. In 2023, Dubai emerged as the leader in the global branded housing market. It is projected that by 2030 the number of units in this segment will double.

Growth of supply in the secondary real estate market

In 2023, developers handed over about 50,000 new residences. The emirate’s real estate market is expected to be replenished with another 67,000 ready properties this coming year.

Digitalisation and innovation in the real estate industry

Dubai is among the world leaders in digitalisation, the adoption of artificial intelligence, proptech and other innovative technologies.

Thanks to this, real estate services are continuously improving, financial transactions have been simplified and are as safe as possible. For example, Dubai became one of the first cities in the world where it is possible to buy real estate with cryptocurrency.

In 2024, 5G, Internet of Things (IoT) and other technologies will continue to be integrated into residential areas, and the choice of online platforms where you can buy, sell and rent real estate will expand.

Sustainability principles

With residential buildings accounting for nearly a third of the world’s carbon dioxide emissions, developers are keen on minimising the negative impact they have on the environment. Sustainability will remain one of the industry’s leading trends in the coming years. Almost all new projects implement renewable energy sources, green technologies and more.

In 2024, Dubai’s real estate market, which has seen a record number of transactions in the previous two years, will continue to grow rapidly. With some of the best conditions in the world for living and conducting business, as well as offering long-term resident visas and other advantages, this metropolis will continue to attract buyers from all over the world. The expected growth in real estate capital values and rental rates offers investors stable opportunities for passive income or resale profits.