Anticipate a continued rise in Dubai property prices driven by foreign funds, tenant-to-owner shifts, and ready-to-move-in options. The 2024 growth rate is projected at up to 10%, a slowdown from 2023. Prime areas like Jumeirah, Downtown, and Palm Jumeirah remain in high demand. Factors like foreign fund inflows, tenant transitions, and investor interest in residency programs contribute to the rally. Analysts foresee 5-10% increases in 2024, slower than 2023. Waterfront locations and established districts, including Downtown Dubai, are expected to see relatively higher price increases. Moody’s notes a 15% price increase since Q2 2021 in Dubai and Abu Dhabi, expecting healthy market conditions for the next 12-18 months with a gradual demand slowdown.
Expectations in Emerging Areas
Anticipate relatively lower price increases in upcoming areas like Dubailand and Mohammed bin Rashid City, where major handovers are expected. The government’s efforts to attract investors, tourists, and residents will support positive market sentiment, job creation, and population growth. With global wealth gravitating towards Dubai, developers are launching high-ticket transactions. Cash buyers, comprising nearly 60% of Sobha Realty’s sales in 2022, benefit from the UAE’s safe-haven reputation. UAE-based buyers dominate development sales for Aldar in Abu Dhabi and more than half for Emaar Properties in Dubai.
New Developments
UAE homebuilders launch new projects, with stronger demand than pre-pandemic levels. Approximately 80,000 units are under construction in Dubai and Abu Dhabi in 2023. Moody’s expects improved homebuilder margins in the next 12-18 months. The launch of new projects and increased demand has led to higher gross margins across the board. UAE-based homebuilders are well-positioned to capitalize on growth opportunities, with strong leverage and Ebit to interest expense ratios. These companies continue to launch new projects and collect cash flow ahead of project completions.
Publish Date: November 26, 2023
Source: https://www.khaleejtimes.com/business/realty/dubai-heres-why-property-prices-will-continue-to-rise-in-2024
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