In the dynamic landscape of Dubai’s real estate, anticipation is mounting as experts project a surge in population, potentially leading to a sustained shortage in the residential market. Knight Frank, a renowned real estate consulting firm, foresees a surge in housing demand propelled by external factors such as the groundbreaking Dubai Economic Agenda, dubbed “D33,” aimed at doubling the emirate’s GDP by 2033. With projections indicating the population will skyrocket to six million by then, and a staggering 7.8 million shortly thereafter, as outlined in the Dubai Urban Master Plan 2040, the stage is set for unprecedented growth.
Faisal Durrani, Partner – Head of Research, Middle East & Africa at Knight Frank, underscores the urgency for significant residential development. “The anticipated rise in the city’s population will necessitate a substantial surge in residential development,” he emphasizes, highlighting the need to almost double the existing housing stock to meet the projected population targets.
Despite supply limitations in sought-after areas, Knight Frank projects a rise in construction of new homes across the city. With expectations of 85,200 residences to be completed by 2028, comprising mostly apartments, the momentum is palpable. This year alone, approximately 40,000 residences are slated for completion, indicating a robust trajectory in development.
Shehzad Jamal, Partner – Head of Strategy & Consultancy, Middle East & Africa at Knight Frank, outlines a forecast for future completions, emphasizing a potential reduction in the long-term rate of home deliveries. “Excluding 2023, and assuming timely delivery of all 40,000 homes forecasted for completion this year, 42,500 units are scheduled for completion between 2024 and 2028,” he states, highlighting a notable 75% reduction compared to historical rates.
The accelerated pace of development suggests a continued escalation in costs, particularly given the expanding population. Sustained demand has already driven up property prices across Dubai, with the real estate sector posting significant gains. Knight Frank’s latest research reveals a 21% increase in apartment prices since January 2020, with villa prices soaring by 51% over the same period.
Durrani notes that despite substantial price increases, city-wide values remain below the 2014 peak, signaling room for further growth. Villa prices in prime areas like Jumeirah Bay Island, Emirates Hills, and Palm Jumeirah have seen remarkable upticks, emphasizing the buoyancy of the market.
In conclusion, Dubai’s residential market is poised for transformative growth, driven by population surges and ambitious economic agendas. As demand continues to outstrip supply, the city’s skyline is set to evolve, offering lucrative opportunities for investors and stakeholders alike
