The real estate market in the UAE continually witnesses cycles of ups and downs. Analysts and investors who keep a close watch on its patterns have made some forecasts for 2024.

Previous growth surges and ensuing decelerations have made some fear the possibility of a market crash. This is why, we have curated this piece to negate this scepticism by offering a thorough assessment of current trends and wider economic indicators, promising continued growth.

Forecasts Anticipate Constant Expansion in 2024

Many experts are forecasting the UAE’s property market to keep growing over the next 18 months. Real estate costs will keep increasing but at a slower speed than in the last three years.

Most analysts predict that Dubai’s property market will leave most other leading real estate markets across the globe behind in terms of growth in the short to mid-term.

Analysts predict these things for the Dubai real estate market in 2024

• 2-4% capital appreciation
• 5-10% rental rises
• 2-3% GDP rise

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The Third UAE Property Growth Cycle: A More Steady Progress

Assessing the current trends in the Dubai real estate industry offers helpful data about its possible progress in 2024.

Over the years, the property market has shown a more perpetual pattern of expansion, showing a developing stage instead of tentative booms. If we analyze the transaction volumes and gross numbers from 2019 to 2023, the picture is quite inspiring:

• 2019: the market witnessed 41k property transactions adding up to AED 81 billion.
• 2020: Despite worldwide issues, 52k property transactions were documented with a gross worth of AED 175 billion.
• 2021: the market saw a considerable rebound with 60k property transactions adding up to AED 150 billion.
• 2022: the favourable spur kept speeding up, hitting 120k property transactions with a gross value of AED 500 billion.
• 2023 (trending): initial signs hint at fortification with approximately 120k property transactions totalling another astounding AED 500 billion.

These statistics show a constant upward trend, with transaction volumes and numbers witnessing considerable growth each year.

The 2023 trend indicates a strengthening of 2022’s 100% growth, emphasizing the market’s consolidation and demand dynamics, albeit worldwide challenges that have influenced other investment markets in the world. For example, the London prime property market is forecasted to experience a period of decline this year

Factors That Impact UAE’s Real Estate Market’s Durability

Multiple drivers play a role in creating an optimistic view of the Dubai real estate market in 2024:

1.    Resilient non-oil industry progress

The UAE’s economy has demonstrated a positive expansion in the first quarter of 2023, largely propelled by the solid progress of the non-oil sector. While the oil segment witnessed moderation thanks to OPEC+ pacts, the non-oil sector remains a central reason for economic growth. This diversification decreases the market’s reliance on oil money, making it more passive to fluctuations in the energy sector.

2.    Diverse economic tailwinds

The country’s economic resilience and durability have been internationally recognized, making it one of the leading most ‘competitive’ nations in the world. This international acknowledgement nurtures investor faith and might garner foreign capital into the property market. Plus, the UAE’s authorities’ take-charge attitude towards investment and usage has led to a notable fiscal surplus, fostering a positive economic atmosphere for expansion.

3.    State Projects

The government’s initiatives to amplify investments and usage have generated favourable results, with steps like lowered transaction charges and long-term residency visas driving international investment in the residential property sector. Emirates hopes that the wider Golden Visa program providing prolonged visas and sponsorship for families will increase the number of residents and long-term investors in the country, further supercharging the real estate sector by bolstering demand for houses. The government expects Dubai’s total population to increase from just 3.5+ million now to nearly 6 million by 2040.

4.    Rebounding oil GDP

In 2023 the oil GDP growth moderates but it is set to recover to 3.5% in 2024 intensifying total economic expansion and boosting the property sector. While the Emirate’s economy is getting diversified with time, oil remains a critical element and its expected rebound escalates the favourable economic expectancy.

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Demand Dynamics and Beginnings of New Initiatives in Dubai

The demand for homes in Dubai hasn’t dwindled thanks to international and local investors. In 2022, an astounding sum of 62,000 flats were transacted, denoting 68% of the total transaction volume. The attraction stretched to townhouses and villas witnessing a staggering 48% YOY increase in demand.

Remarkably, off-plan property developments have been a propelling power behind the solid transaction activity. In 2022, around 57% of the transaction activity was focused on off-plan developments, showing developers’ faith in the market’s potential.

Also, new project launches have increased, seeing a whopping 73% rise in 2022. A sum of 35,900 developments were launched, containing 71% flats and 29% townhouses and villa projects.

This incursion of new supply demonstrates the market’s vigour and developers’ expectation of ceaseless demand, but it also hints at the anticipated increase in price growth, we expect 2024 to show.

In a nutshell, the property market in the UAE is resilient and diversified and oil GDP is projected to rebound, which combinedly offers a favourable view for the future of the market.