The property market in Dubai is currently experiencing a significant surge in sales figures and property values, with 2024 shaping up to be another record year. Local real estate firms have reported increasing demand for property, particularly in the luxury sector, which is driving up prices across the city. This trend comes at a time when the United Arab Emirates is positioned to remain the world’s top wealth magnet for the third consecutive year.
Concerns Over Rising Costs
Despite the positive outlook for Dubai’s property market, there are growing concerns about the city becoming increasingly expensive. Hussain Sajwani, the chairman of Dubai property giant Damac, has expressed apprehensions about the rising costs in the city. He highlighted the challenges of high demand leading to inflated prices, making it difficult for average residents to afford basic necessities such as housing and education. Sajwani emphasized the need for government intervention to address these affordability issues amidst continuous population growth.
Burgeoning Demand in the Property Market
The latest data from the Dubai property market indicates a robust demand for real estate. In July 2024, property sales reached 49.6 billion dirhams, marking a 31.63% increase from the previous year. Elite Merit Real Estate reported over 43,000 property transactions valued at approximately AED122.9 billion in the first half of 2024, driven by the rapid absorption of new inventory. The firm estimates that around 80% of the units launched since 2022 have already been sold, underscoring the strong demand in the market.
The Covid-19 pandemic has had a significant impact on Dubai’s appeal as a global city. While many parts of the world were grappling with lockdowns, Dubai emerged as a desirable destination for remote workers and entrepreneurs due to its proactive measures and incentives for new residents. The city’s ability to attract talent and businesses has been enhanced during this period, positioning it as a thriving hub for a diverse range of individuals.
Dubai has had a history of volatile boom-and-bust cycles, most notably during the 2008-2009 crisis. However, Hussain Sajwani expressed confidence in the current stability of the market, attributing it to the stringent regulations introduced by the Dubai government post-crisis. These regulations have played a crucial role in safeguarding the market against unchecked development and speculative practices, ensuring a more sustainable growth trajectory.
While Dubai’s property market continues to flourish with record sales and high demand, there are legitimate concerns about the affordability of living in the city. Addressing these challenges will be essential to maintaining a balanced and inclusive real estate sector that benefits all residents. With strategic planning and effective governance, Dubai can navigate its growth trajectory while ensuring sustainability and accessibility in the property market.