Following a year of significant growth ranging between 23–30 percent, upscale residential rents in Dubai are poised to surge by up to 20 percent in 2024, according to experts.
Various factors contribute to this anticipated upward trend, including Dubai’s increasing allure as a haven for the affluent, heightened investor interest, a surge in professionals relocating to the city, and a growing population.
Experts suggest that rental prices will continue to climb as long as the net migration to Dubai outpaces the rate of new home construction. The trajectory of rents in 2024 may hinge on factors like a rising number of individuals opting to buy rather than rent and the escalating demand for real estate as an attractive investment avenue.
Ilnara Muzafyarova, head of Colife, a real estate management firm, notes a robust upward trend following a sharp rental price increase of 23 percent annually in the first half of 2023, with a year-end projection nearing 30 percent. Muzafyarova forecasts a 20% increase in short-term rentals (up to six months) from 2023, while long-term rentals (over six months) are expected to rise by 15%. This projection is bolstered by the market’s organic expansion, reflected in a 15% increase in apartment prices between mid-2022 and mid-2023.
S&P forecasted in November 2023 that home prices would escalate by 5.0% to 7.0% in 2024. Tatiana Leskova, associate director of Corporate Ratings at S&P, indicates no signs of Dubai’s property market slowing down this year.
Dubai’s real estate market is thriving, evidenced by surging rents, escalating property values alongside the construction of new high-rise buildings, and a notable surge in property transactions, according to analysts at real estate consultancy firm CBRE.
Colife, the owner of a one-bedroom apartment in Dubai Marina, reported a substantial annual increase in monthly income of 21.2%, reaching $2,970. Colife anticipates even greater returns in 2024, averaging $3,415 per month in the neighborhood.
Experts foresee a consistent demand for residential spaces in Dubai due to the city’s burgeoning population and continuous influx of international professionals.
Real estate consultancy Asteco observed a gradual moderation in the rental market’s growth rate in the third quarter, with apartment, villa, and office rental increases at 3.0 percent, 2.0 percent, and 4.0 percent, respectively, over the three months. On an annual basis, these changes were 18%, 19%, and 29%, respectively.
Property Finder’s November data highlights the strongest demand for one-bedroom apartments, with 36% of respondents searching for such units. Additionally, three-bedroom villas or townhouses were preferred by 42% of buyers.
The Dubai Statistical Centre estimates the population of Dubai as of July 2023 at 3,604,030, up from 3,515,264 in July 2022. The city’s Development Master Plan projects a population of 5.8 million by 2040.
