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Dubai Real Estate: Anticipating Price Trends in the Coming Year

Price Trends A recent report from S&P Global indicates a potential slowdown in Dubai’s real estate market in 2024, with prices anticipated to decelerate. The sector is projected to grow by five to seven percent next year, and analysts foresee a moderation in price increases over the next 12-18 months.

Price Dynamics

While villa prices have reportedly surpassed previous peak levels, apartment prices lag behind at 10-20 percent below historical peaks due to oversupply. The market has showcased resilience, experiencing double-digit annual price increases and record pre-sales since 2021.

Key Factors Influencing the Market: Price Trends

Foreign investoment, particularly high-net-worth individuals, continue to play a pivotal role in sustaining demand, especially for prime properties. Dubai’s relative immunity to external pressures from the global economy, its diversified economic strength, and robust fiscal positions contribute to the positive market outlook.

Sector-Specific Insights

S&P anticipates continued growth in the hospitality, wholesale and retail, and financial services sectors, contrasting with a likely slowdown in real estate in the next 12-18 months.

Population and Visitor Numbers: Price Trends

Dubai’s population has grown over 2 percent to 3.6 million, and international visitor numbers are recovering. Dubai International Airport recorded over 41 million passengers in H1 2023, exceeding 2019 figures.

Potential Risks

As real estate prices rise, analysts highlight the mounting risk of a cyclical reversal. Developers are expected to adapt their offerings to meet demand, focusing on prime properties and possibly launching smaller units to align with evolving buyer preferences.

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