The luxury residential real estate market in Dubai has experienced the fastest growth rate in the world in 2023, and with Why Dubai is Cheaper for $2M Property Deals Than Major Cities, it is predicted to continue its strong performance in 2024, surpassing almost all major cities.

Read this also: The real estate boom in Dubai increases Emaar’s net profit to Dh7.8 billion, up 33%.

In recent years, capital value appreciation has made Dubai a global leader. In 2023, prices increased by 17.4%. But in 2024, this increase is anticipated to slow to 4% to 5.9%, indicating a move toward a more normalized market, according to Jelena Cvjetkovic, Director at the international real estate consultancy Savills.

Driven by the increasing number of high-net-worth individuals relocating to the city, Dubai is predicted to be the second fastest-growing market in 2024, only behind Sydney, despite the anticipated slower growth.

Cvjetkovic emphasized that the 17.4% increase in capital values in 2023 still surpassed other top markets by more than seven percentage points, even with a slowdown in growth to 5.6% in the second half of the year.

Read this also: Offplan Sales Keep Increasing in Dubai, but Ready Sales Are Declining

Major cities including Mumbai, Bangkok, Tokyo, Sydney, Shanghai, Madrid, Barcelona, Geneva, and Singapore were not able to match Dubai’s growth in capital value in 2023.

Because its prices for premium residential real estate are competitive, the emirate continues to draw wealthy buyers. About 9,500 billionaires have moved to Dubai in the last two years, solidifying the city’s reputation as a leading location for opulent real estate.

Competitive Rates

Only Sydney’s anticipated 8% to 9.9% growth is predicted to outpace Savills’ 4% to 5.9% growth in Dubai’s top real estate market by 2024.

Dubai’s and the UAE’s political and economic stability is a big plus, particularly in 2024—an election year that may exacerbate uncertainty in other international markets.

Read this also: Dubai’s Property Market: Among the Fastest-Growing in the World

Savills reports that houses in Dubai’s premium sector are still reasonably priced globally, averaging $850 per square foot. The city’s mild weather, easy-to-get visa, and more affordable cost of living are drawing in both domestic and foreign purchasers.

Dubai, after Lisbon, Berlin, and Singapore, was one of the top four cities in terms of rise in prime residential rental value. Dubai’s rents are still cheaper than those in New York, Hong Kong, Los Angeles, Singapore, Paris, Geneva, and Amsterdam, but being higher than those in Bangkok, Mumbai, and Sydney.

By international standards, Dubai is a high-yielding city with yields of 4.8%. Over the last year—during which time rentals increased by 8.9% and capital values increased by 17.4%—prime rates have tightened by 40 basis points. Since capital value growth is predicted to continue exceeding rent increases, we can anticipate additional compression in yields this year,” Cvjetkovic continued.