Rental prices are expected to increase by up to 20% in 2024

There is no evidence of a slowdown in property prices in Dubai this year.

Rents in Dubai’s main residential areas are expected to rise by up to 20 percent in 2024, after a year of notable rebound estimated to be in the range of 23 to 30 percent.

Real estate experts predict that the sustained dynamism is due to multiple reasons, including increased investment appetite, the growing influx of professionals, population growth and the city’s growing appeal as a haven for the wealthy.

They said that if net migration to Dubai continues to be higher than the rate of new housing delivery, it will continue to put upward pressure on rental prices. Factors that could dictate the trajectory of rents in 2024 include more residents choosing to buy rather than rent their homes, and the growing appeal of property as an attractive investment opportunity.

After a sharp rebound in rental prices of 23 percent annually in the first half of 2023 and a year-end projection of around 30 percent, the upward trend appears strong, according to Ilnara Muzafyarova, director of Colifea real estate management company. muzafiarova It predicted a 20 percent increase in short-term rentals (up to six months) compared to 2023, and a 15 percent increase for long-term rentals or more than six months. This is due to the organic growth of the market, which has also seen a 15 percent increase in apartment prices from mid-2022 to mid-2023.

In November 2023, S&P projected a 5.0 percent to 7.0 percent increase in home prices during 2024. Tatiana Leskova, Associate Director of Corporate Ratings at S&PHe said there is no evidence of a slowdown in Dubai property prices this year.

Analysts in real estate consulting company CBRE He said rents in Dubai have increased by about 42 percent since January 2020, while house prices have increased by about 33 percent. Villa rentals have also seen a similar trend, reaching an average of $88,400 per year, with a 19.2 per cent increase in the average rent recorded in November.

Experts said the upward momentum in rents reflects the vitality of Dubai’s property market, with property values ​​rising alongside operational skyscrapers and rising property transactions.

Colife experienced a notable 21.2 percent increase in monthly income to $2,970 over the past year for the owner of a one-bedroom unit located in Dubai Marina. In the future, owners can anticipate even higher returns, of around $3,415 per month in 2024, according to Colife.

Real estate experts believe that given the continued influx of global professionals to Dubai, along with its population growth, sustained demand for residential space can be expected.

According to the real estate consultancy Asteco, Dubai’s rental market has seen a gradual moderation in growth rate in the third quarter. There is a clear slowdown with rental gains of 3.0 percent, 2.0 percent and 4.0 percent for apartments, villas and offices over the three months. On an annual basis, the changes were 18 percent, 19 percent and 29 percent, respectively, he said. Asteco.

Property FinderData from November shows that one-bedroom apartments are in the highest demand. About 36 percent of people were looking for one-bedroom apartments, while 30 percent were looking for two-bedroom apartments and 24 percent were looking for studios. For villas/townhouses, 42 per cent looked for three-bedroom options and 35 per cent looked for four-bedroom options or more. 66 percent of renters preferred furnished homes, but 32 percent wanted unfurnished ones. For villas/townhouses, 51 percent searched for unfurnished listings and 48 percent searched for furnished listings.

The population of Dubai, in July 2023, was 3,604,030 people, compared to 3,515,264 in July 2022, according to the Dubai Statistical Center. According to Dubai’s Development Master Plan, the city’s population is projected to grow to 5.8 million by 2040.

News Source: Khaleej Times