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Dubai Real Estate Market: 5% Growth in Prime Locations - MSBait Optimistic Amid Supply Constraints

Dubai's real estate sector is poised for robust growth in the coming year, with prime property markets, including iconic locations like The Palm Jumeirah and Emirates Hills, projected to experience a 5% increase in prices, according to a recent report by Knight Frank. The overall property market in the emirate witnessed a remarkable 19% year-on-year surge in the third quarter of this year, with a cumulative increase of 30% since the first quarter of 2020.

The Palm Jumeirah is expected to rise by 5 per cent next year
The Palm Jumeirah is expected to rise by 5 per cent next year.

The surge in property prices is attributed to the convergence of limited supply and a resurgence in demand from key markets such as China and India. The report also anticipates a 3.5% growth in prices for other segments of the residential market.

During the first nine months of this year, the average residential prices saw a substantial 15.6% annual increase, contributing to Dubai's reputation as a highly sought-after destination for real estate transactions. MSBait Real Estate, a prominent player in the market, remains optimistic about the ongoing trend.

Faisal Durrani, Partner and Head of Research for Mena, highlighted the enduring appeal of Dubai's prime markets, accounting for 4.8% of total transaction value in the first nine months of 2023. The city recorded an impressive 116,116 new property transactions valued at Dh429.6 billion ($117 billion) during this period, indicating a significant 33.8% annual increase in transactions and a remarkable 36.7% rise in values.

The strong rebound of Dubai's property market is attributed to various government initiatives, including residency permits for retirees and remote workers, along with the expansion of the 10-year golden visa program. These measures, coupled with the highest quarterly price rise in a decade, have fueled demand in the residential market.

While off-plan sales for the first nine months reached Dh100 billion, ready homes sales soared to Dh104.9 billion, underscoring the dominance of the ready homes market. Notable growth rates were observed in Dubai South, Jumeirah Lakes Towers, and Umm Suqeim Third, affirming the diverse and thriving nature of the real estate landscape.

Despite these positive indicators, potential risks loom, as acknowledged by Mr. Durrani. A global economic slowdown and regional tensions could impact the local economy and, subsequently, the real estate market. Nevertheless, current projections indicate a city that remains undersupplied, with the ongoing population growth and a shortage of new homes in prime areas and the upper price spectrum. With 77,864 homes under construction and an annual average of approximately 13,000 homes expected to be delivered over the next six years, the market appears poised for sustained growth, with MSBait Real Estate at the forefront of these developments.

Source The National News

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