Demand for residential rentals remains healthy given Dubai’s economic growth and expatriate workforce
Rental growth in the Dubai real estate market is expected to moderate in 2024 due to a significant supply of new properties set to hit the market, an expert told Arabian Business.
Associate Director of Research , said over 20,000 new residential units are likely to be completed and handed over in Dubai during 2024. This follows more than 47,000 new unit launches last year.
“More than 50 percent of new project launches were concentrated across Dubai South East, which is likely to limit any significant price growth across the city,” he said.
“Rental growth is likely to moderate across select peripheral locations of the city, with a large quantum, of upcoming supply,” he said.
However, Pillai does not foresee rents decreasing. Instead, he predicts rental prices will “stabilise” as the new stock helps improve the overall housing supply. Demand for residential rentals remains healthy given Dubai’s economic growth and expatriate workforce.
“Demand for luxury residential properties is on the upswing across Dubai,” he said.
“A total of 3,788 units priced above AED10 million were transacted across the city, growing by 63 percent year-on-year. There is a two-tier market emerging with more established locations, with luxury developments witnessing sustained demand.
The UAE economy is projected to expand by 5 percent in 2024. Non-oil sectors now account for 73 percent of the nation’s GDP, underpinning private sector resilience. Mega-infrastructure projects also continue stimulating activity.
Luxury homes boom in Dubai
Luxury residential property transactions grew 63 percent in Dubai last year. Established locations retain strong demand, with more new luxury developments performing well.
The office and industrial property markets seem poised for rental growth. Anticipates prime office rents rising 20 percent this year as Grade A vacancy rates remain under 5 percent. Logistics yields may also tighten slightly on looming interest rate cuts.
While global economic conditions present challenges, the Middle East real estate sector will remain robust backed by governments’ efforts stimulating non-oil growth sectors vital to economic diversification.
