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What to expect from Dubai’s property space in 2024? Analysts answer

Real estate consultancy Asteco saw the Dubai rental market grow at a moderate rate in the third quarter of 2023

Rents in Dubai, which hit the headlines in 2023, for their consistent rise, will follow a similar trend in 2024 but at a modest pace, due to the market undersupply and the migration of foreign professionals and investors into the Emirati city, stated the analysts.

Areas like Jumeirah Village Circle (JVC) and Tilal Al Ghaf will see several property handovers in the coming days as well.

“I see rents continuing to rise at a more measured rate than what we have seen over the last two years. There is still an undersupply of property with us receiving large numbers of enquiries and listings stabilising through to the fourth quarter. It is the number of homes that will be handed over next year offering competition on prices that makes me think that price increases may be less punchy,” stated Jacob Bramley, leasing manager at Betterhomes, while interacting with the Khaleej Times.

Real estate consultancy Asteco too saw the Dubai rental market growing at a moderate rate in the third quarter of 2023.

“Whilst there has been activity in both lower and upper rental rate brackets, certain averages have remained static,” mentioned the full-service realty company.

“There is a definite slowdown with rental gains at 3%, 2%, and 4% for apartments, villas and offices over the three months. On an annual scale, the changes stood at 18%, 19% and 29%, respectively,” it stated further.

Bramley, however, pointed out that the demand for housing across the Emirati city had continued to soar, thereby leading to the scarcity of vacant properties.

“For landlords, this translates into minimal to no long void periods, affirming a robust and thriving rental market,” the leasing manager at Betterhomes stated further.

Cherif Sleiman, chief revenue officer of Property Finder, stated that the Dubai Marina, Jumeirah Village Circle (JVC), Business Bay, Downtown Dubai, and Jumeirah Lake Towers (JLT) have become the commonly preferred areas for apartments, while for villas, Dubai Hills Estate, Damac Hills 2, Al Barsha, Jumeirah, and Damac Hills are the most popular ones.

Sleiman sees these areas commanding higher rental growth in the coming years, based on the property demand and popularity.

One-bedroom Apartments See Demand Spike

Meanwhile, Property Finder’s November 2023 data showed one-bedroom apartments witnessing the highest demand.

Around 36% of Emirati citizens were reportedly searching for one-bedroom apartments, while 30% and 24% looked for two-bedroom apartments and studios respectively.

“For villas/townhouses, 42% looked for three bedrooms, and 35% were searching for four-bedroom and larger options. Furnished homes were preferred by 66% of tenants, but 32% wanted unfurnished. For villas/townhouses, 51% looked for unfurnished, and 48% sought furnished listings,” Sleiman noted further, as he saw new projects in previously unexplored neighbourhoods bringing in more options to help sustain the property growing demand in Dubai.

“If increased net migration continues to be higher than the rate that new homes are handed over, this will continue to put upward pressure on rental prices. We may see trends of residents in Dubai deciding to buy compared to renting. Should more of the population decide to buy their home rather than renting long term and if there is a change in real estate being an attractive investment opportunity, this could also dictate rents in 2024,” Jacob Bramley concluded.

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