The property market in Dubai is currently experiencing an unprecedented surge in sales figures and property values, with 2024 shaping up to be another record-breaking year. Local real estate firms are reporting a significant increase in demand for properties, particularly in the luxury segment, which is consequently driving up prices across the city. This surge comes at a time when the United Arab Emirates is poised to become the world’s top wealth magnet for the third consecutive year, further fueling the demand for high-end properties in Dubai.
While the booming property market may seem like good news for investors and developers, there are growing concerns about the affordability of living in the city. Hussain Sajwani, chairman of Damac, one of Dubai’s leading property companies, has expressed apprehension about the increasing costs of living in Dubai. Sajwani emphasized that as demand for properties continues to rise, the city is becoming more expensive, making it challenging for both residents and businesses to cope with the inflationary pressures. He urged the government to find ways to address the affordability issue in light of the continuous influx of people into the city.
Recent data from Elite Merit Real Estate revealed that property sales in Dubai soared to 49.6 billion dirhams ($13.5 billion) in July 2024, representing a substantial 31.63% increase compared to the previous year. The report highlighted that the first half of 2024 alone witnessed over 43,000 property transactions valued at approximately AED122.9 billion, indicating a significant surge in demand fueled by the rapid absorption of new inventory. Notably, around 80% of the units launched since 2022 have already been sold, underscoring the robust growth in Dubai’s property market.
Dubai’s Appeal Amid the Pandemic
Despite the economic uncertainties brought about by the COVID-19 pandemic, Dubai has managed to maintain its appeal as a global city and a preferred destination for residents and businesses alike. Hussain Sajwani attributed Dubai’s resilience and popularity during the pandemic to the emirate’s proactive measures, such as offering visas for remote workers and entrepreneurs, which encouraged new residents to settle in the city. Sajwani noted that Dubai’s ability to attract both wealthy individuals and talented professionals has propelled its growth to new heights, distinguishing it from its pre-pandemic era.
Dubai’s property market has endured turbulent periods in the past, notably during the 2008-2009 crisis when the market witnessed a significant downturn. However, Sajwani expressed confidence in the current regulatory framework established by the Dubai government, which has strengthened oversight on developers, customers, and zoning regulations to prevent a repeat of the previous crisis. He emphasized that the stringent regulations have contributed to Dubai’s stability, ensuring that only credible developers can enter the market and launch projects, thus safeguarding against market volatility.
While Dubai’s property market is experiencing unprecedented growth and attracting new investors, concerns about affordability, inflation, and market stability persist. It is essential for stakeholders, including the government, developers, and investors, to collaborate and implement effective strategies to address these challenges and sustain the city’s growth trajectory in a responsible and sustainable manner.