Dubai Real Estate Boom: 11 Consecutive Quarters of Growth and What Lies Ahead

Dubai Real Estate Boom: 11 Consecutive Quarters of Growth and What Lies Ahead

Dubai’s real estate market continues its remarkable ascent, marking the 11th consecutive quarter of growth in Q3 2023. Analysts predict substantial price growth over the next five years, attributing it to the city’s competitive pricing compared to global counterparts and an impending undersupply. In this blog post, we delve into the factors driving Dubai’s real estate surge, explore the market dynamics, and discuss why the next five years are poised to be transformative for the Emirate’s property landscape.

Comparative Pricing:

Dubai’s property prices, according to Knight Frank, are notably cheaper than other major global cities, including Hong Kong, New York, Singapore, London, Paris, Tokyo, Sydney, and more. The data reveals that $1 million can secure 105 sqm of prime property in Dubai, emphasizing the city’s affordability, which is more than 50% cheaper than its global counterparts. This affordability is expected to attract a surge of high-net-worth individuals, investors, and end-users to the Dubai real estate market.

Undersupply Dynamics:

Knight Frank’s data further highlights that Dubai is facing an undersupply in the real estate market, with 77,864 homes under construction, scheduled for delivery by the end of 2028. This is significantly below historical completion rates, indicating a potential shortage in the coming years. Faisal Durrani, Partner and Head of Research for Mena at Knight Frank, emphasizes that the city remains undersupplied, especially in prime neighborhoods and the upper echelons of the price spectrum.

Market Growth Projections:

Nick Candy, CEO of Candy Capital, asserts that Dubai’s real estate, particularly at the top end of the market, is expected to witness substantial price growth over the next five years and beyond. The city’s prime markets, sought-after for the fourth consecutive year, are poised for a transformative period. The continuous rise in residential property values, witnessing a 30% cumulative increase since Q1 2020, showcases the unwavering confidence in Dubai’s luxury real estate market.

Segment-wise Analysis:

In the third quarter of 2023, residential property prices in Dubai surged by 5%, marking the 11th consecutive quarter of growth. Apartment prices rose by 5.1% to over Dh1,300 per sqft, indicating a robust 26% increase since Q1 2020. Despite a significant 19% increase in the past year, apartment prices remain 10% below the 2014 peak. In the villa segment, prices experienced a 4.5% increase between June and September, reaching an average of Dh1,580 per sqft, reflecting an 18% surge compared to the previous year and a remarkable 57% increase since Q1 2020.

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