Dubai Real Estate Is Resilient

Dubai’s property market continues to defy all odds, growing from strength to strength, supported by robust demand and inflationary impulses. A snapshot of the current market state was given by Firas Al Msaddi, CEO of fäm Properties, in the most recent market update, underlining the continuous dynamism that this segment is drawing from domestic and global investors alike.

This trend makes the city of Dubai a leading global destination that continues to attract new residents, tourists, and investors alike. This, in turn, fuels decent demand for different types of properties, both rents and saleable types: ready-to-buy homes and off-plan projects. The sustained demand is a major factor in absorbing the available supply, especially when a large number of off-plan projects are expected to start delivery of units by Q1 2025.

Besides that, the ability of the market to attract both individual and institutional investors ensures that there is a mixed investment base. This, in turn, helps mitigate risk and provides a stable environment for the market, something that assures sustainable growth.

Inflation is also a key factor that shall be defining real estate market dynamics in Dubai. The cost of construction materials, logistics, and other related expenditures on development sites is likely to trigger the price of new properties. At the same time, properties built at lower costs in previous years are bound to appreciate in line with replacement costs. This inflationary pressure is indeed a challenge, but it also provides an opportunity for capital gains, especially for those owning properties.

The report expects that the exorbitant capital gains that have been witnessed over the last two years might not be sustainable, but there will be decent and healthy growth. The rationale for this is that the market’s fundamentals are very strong, and it has been able to adapt to different economic conditions.

The transaction volumes have significantly grown in the first quarter of 2024, hence showing the strength of the market. The number of sales transactions doubled from 32,725 in Q1 2023 to 65,450 in Q1 2024, thereby tripling from 21,817 in Q1 2022. This big leap in transaction volumes shows a very vibrant and attractive market.

The value of sales transactions in Q1 2024 surged to AED 186 billion, up 24% from AED 150 billion in Q1 2023, and was indeed high by 107% from AED 90 billion in Q1 2022. These figures bring out the strength in investor confidence and the overall health of the market.

The Dubai real estate market is set to continue attracting more growth, and the indicators to these are: Infrastructure development is ongoing, and off-plan project completions are to carry on. Moreover, Dubai continues to attract the global investor community due to its strategic location and strong reputation as a safe and dynamic investment destination.

The market has been resilient to economic oscillations and inflationary pressures. Investors are likely to remain confident, considering the history of the market in delivering on returns, together with the proactiveness in addressing emerging challenges.

In summary, the Dubai real estate market remains a testament to the strategic vision and economic resilience of the emirate. The market shows strong demand fundamentals, high volumes of transactions, and the ability to operate in a high-pressure environment of inflation. As Dubai continues to emerge as a global hub, the real estate sector is going to be increasingly important for the economic well-being and investor confidence in the city.