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Dubai's Real Estate Market: A Global Phenomenon

A vibrant metropolis known for its stunning skyline, luxurious lifestyle and booming real estate market, Dubai continues to shine as a jewel among the world's top locations such as New York, London and Hong Kong. What's even more remarkable is that this market shows no signs of slowing down, even in light of recent natural disasters.


Experts predict that property prices and rentals in Dubai will continue to rise into 2025, despite recent record rainfall and subsequent flooding. This natural phenomenon has had only a minimal effect on the real estate market, underscoring the robustness and resilience of this sector.


Despite global economic fluctuations, Dubai's real estate market appears unfazed. Experts predict that prices are expected to increase by five to seven percent annually in both 2024 and 2025. This growth is driven by overwhelming demand that far exceeds available supply.


A striking trend is the remarkable increase in pre-sales of new-build homes, which increased by no less than 73% in the first quarter of 2024 compared to the previous quarter. These pre-sales represented 63% of all transactions, indicating that investors are confident in the future of Dubai's real estate market.


This growing interest can be attributed to the strong demand for high-quality assets from renowned developers, combined with attractive incentives offered to buyers at the launch of projects.


With the government's population growth forecasts in mind, it is estimated that as many as 70,000 new homes will be needed annually between now and 2028. This growing need for housing is expected to continue even when considering the dynamics of supply and demand separately.


Meanwhile, the UAE government aims to attract one million remote workers through its virtual work program. The new visa system now offers five and ten year residency options, while the issuance of long-term 'Golden' visas has recently been expanded. These measures have led to a shift with more expats choosing to buy rather than rent, helping Dubai's real estate market continue to thrive.


Investing in Dubai's Real Estate Market: Why It's a Smart Move


With new developments being developed across the city, here is an overview of the key benefits of investing in Dubai:

1. Prime Housing Market: In 2023, Dubai's prime residential market witnessed a remarkable increase in capital values, rising by 17.4%. This impressive growth exceeded the global average of just 2.2%, as reported by Savills.


2. Competitive Pricing: At $750 per square meter, Dubai's real estate market remains relatively competitively priced compared to other global cities. This affordability attracts both international and domestic investors, who are looking for high returns on investment.


3. Forecast Growth: Looking ahead to 2024, Savills predicts continued positive growth for Dubai's premier residential market. Despite a slight moderation compared to the previous year, with growth expected to be between 4 and 5.9%, Dubai retains its appeal as a promising investment destination.


4. Rental Price Increase: Rents in Dubai increased by almost 10% in 2023, exceeding the global average of 5.1% compared to other major cities monitored by Savills. This robust rental performance ensures stable income streams for real estate investors.

5. High rental yields: Dubai boasts high rental yields, namely an impressive 4.8%. This exceeds the global gross yield average of 3.1%, offering investors an attractive return on their rental properties.


6. Low transaction costs: The costs associated with buying, holding and selling real estate in Dubai are among the lowest in the world and are less than 10% of the real estate purchase price. This favorable cost structure improves the profitability of real estate investments in the emirate.


7. Stable Economic Environment: Dubai's robust economy, supported by diversified sectors such as tourism, finance and trade, provides a stable environment for real estate investment. Moreover, rapid urban development projects and investor-friendly policies further strengthen confidence in the market.


8. Strategic Location: The secret to real estate success is “Location, location, location,” as any real estate expert would tell you. And the city has the strategic advantage of being located at the crossroads of East and West. The location, combined with access to regional markets, Mon


turns it into a hub for business and commerce. This geographic advantage enhances the long-term value proposition of real estate investments in the city.


9. Government Reforms: Ongoing government reforms, including visa reforms aimed at attracting investors and expats, are contributing to sustained demand in the real estate sector. Initiatives such as long-term visas and simplified visa procedures are further encouraging investment in Dubai's real estate market.


10. Expected Top Performer: With Sydney, Dubai and other global cities poised for growth in 2024, Dubai stands out as a top performer. Savills expects Dubai to continue its upward trajectory, with prices expected to rise by a further 4% to 5.9% over the next year.


11. Perfect Storm of Benefits: Investing in Dubai real estate offers attractive opportunities for investors, characterized by robust capital growth, high rental yields and a favorable regulatory environment. As global markets deal with economic uncertainty, the growing real estate market is proving to be...

Investing in Dubai's real estate market is not only a smart move, but also a step towards a prosperous future.

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