by Nbsrealestate
Amid a year marked by substantial growth, estimated between 23–30%, the upscale residential rental landscape in Dubai is poised for another significant upswing, with expectations of a 20% increase in 2024.
Experts attribute this projected surge to various factors, including Dubai’s growing allure as a haven for the affluent, heightened investor interest, an influx of professionals, and a surging population.
The sustainability of the upward trajectory in rental prices hinges on factors such as the net migration rate to Dubai outpacing the distribution of new housing units. The trends in 2024 will likely be shaped by evolving preferences, such as a rising inclination towards property ownership over renting and a growing demand for real estate as a lucrative investment avenue.
Ilnara Muzafyarova, Head of Colife, a real estate management company, observes a robust upward trend following a sharp annual increase of 23% in rental prices during the first half of 2023, projecting an estimated 30% increase by year-end. Muzafyarova anticipates a 20% rise in short-term rentals (up to six months) and a 15% increase in long-term rentals (more than six months) in 2024. This aligns with the market’s natural expansion, witnessing a 15% surge in apartment prices between mid-2022 and mid-2023.
S&P’s November 2023 prediction suggests a 5.0% to 7.0% rise in home prices for 2024. According to Tatiana Leskova, Associate Director of Corporate Ratings at S&P, there is no evidence indicating a slowdown in Dubai’s property market this year.
CBRE analysts note a 42% increase in rents and a 33% increase in home prices in Dubai since January 2020. Villa rentals have seen a substantial surge, averaging $88,400 annually following a 19.2% increase in November alone.
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Colife’s ownership of a one-bedroom apartment in Dubai Marina saw a noteworthy 21.2% rise in monthly income to $2,970 over the previous year. Predictions from Colife indicate even more significant returns, reaching approximately $3,415 per month in 2024.
Real estate experts anticipate sustained demand for residential spaces in Dubai, fueled by the city’s expanding population and the continuous influx of international professionals.
The third quarter witnessed a gradual moderation in Dubai’s rental market growth, according to Asteco, with a noticeable slowdown in rental increases for apartments, villas, and offices over the three months. However, on an annual basis, changes were recorded at 18%, 19%, and 29%, respectively.
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Property Finder’s November data indicates the highest demand for one-bedroom apartments, with 36% of respondents seeking them, followed by two-bedroom apartments at 30%, and studio apartments at 24%. Preferences for unfurnished versus furnished properties also vary, with 66% of tenants favoring furnished apartments and 32% desiring unfurnished ones.
As of July 2023, the Dubai Statistical Centre estimates a population of 3,604,030, up from 3,515,264 in July 2022. The Development Master Plan for Dubai envisions a population of 5.8 million by 2040.
In conclusion, the projections for a 20% surge in Dubai’s rental market in 2024 reflect the city’s resilient real estate sector and its ongoing appeal as a global investment destination.
