The demand density for real estate in Dubai exceeds expectations

Real estate market experts in Dubai expect some slowdown in demand pace during 2024 after the record numbers witnessed by the market during 2023, but the strong demand journey continued exceeding expectations.

During the first quarter of 2024, the real estate market in Dubai continued to record high numbers with more than 34,000 transactions, driven by strong demand that currently exceeds supply.

The population of Dubai is expected to rise from 3.7 million in 2023 to 7.8 million by 2040.

High demand dominates the real estate scene

Despite tens of thousands of new homes, the market is still unable to meet what is needed to keep up with the population increase, imposing upward pressure on prices.

The number of homes expected to be delivered by the end of 2028 is 110,000, equivalent to 25,000 completions annually, which is below the historical average of 30,000 deliveries annually.

Considering the government's population growth forecasts, estimates indicate that up to 70,000 homes may be needed annually.

Numbers and implications

These numbers and forecasts clearly indicate, based on market fundamentals of supply and demand, that real estate prices in Dubai will continue to rise, albeit at varying rates, in the coming years.

Although these numbers are future projections subject to review, the solid numbers lie in the performance review for 2023, where the average sales prices of residential properties in Dubai increased by approximately 18% between 2022 and 2023, and average rents increased by about 26% in the same period.

Resale of properties constituted 41% of the total transactions recorded during the year, while cash buyers still dominate the market.

Based on the strong numbers achieved in the first quarter of 2024, this strong trend is expected to continue throughout the year, while growth may stabilize further with the release of new supplies in the coming years.

Editing: :Imtilak Real Estate©