Dubai’s Property Market Expected to See Substantial Price Growth Over the Next Five Years

Published: Mon 6 Nov 2023, 7:09 PM

Dubai’s property market has maintained its upward trajectory for the 11th consecutive quarter in Q3 2023, and analysts predict “substantial price growth” in the coming years. Despite ongoing price increases, property prices in Dubai are still considered “very cheap” compared to major global cities, such as Hong Kong, New York, Singapore, London, Paris, Tokyo, and Sydney. According to global real estate consultancy Knight Frank, $1 million can buy 105 square meters of prime property in Dubai, whereas the same amount could only afford 44 square meters in cities like New York and Singapore. This significant price disparity is expected to attract high-net-worth individuals, investors, and end-users to the Dubai market.

Nick Candy, CEO of Candy Capital, believes that the top end of the Dubai real estate market will experience substantial price growth over the next five years and beyond. Currently, there are 77,864 homes under construction in Dubai, with an average of approximately 13,000 homes scheduled for delivery each year until 2028. However, this falls considerably below historical completion rates, indicating that the city remains undersupplied.

Faisal Durrani, partner and head of research for Mena at Knight Frank, emphasized the scarcity of new homes in prime neighborhoods and in the upper echelons of the price spectrum. As a result, Dubai’s prime markets continue to be highly sought-after. In the third quarter of 2023, around 87,000 homes worth $10 million or more were resold in Dubai, resulting in a total transaction value of Dh224.6 billion. Although September saw a decrease in monthly activity, with 7,500 transactions compared to the consistent pace of over 10,000 homes sold per month between January and August.

Knight Frank reported that residential property values in Dubai have continued to rise for the 11th consecutive quarter. In Q3 2023 alone, average residential property prices increased by 5%, bringing the cumulative increase since Q1 2020 to 30%. However, prices remain 7% below the peak of 2014. Apartment prices in Dubai have seen a robust 26% increase since Q1 2020, and villa prices have surged by 57% in the same period.

According to Candy, Dubai’s remarkable trajectory, world-class lifestyle, and strategic position as a global city have solidified its status as a magnet for the world’s elite. The ongoing confidence in Dubai’s luxury real estate market is a testament to the city’s appeal.