How will Dubai Property Prices Look in the Coming Years?
The real estate market in Dubai is expected to slow down in the coming year as prices slow, according to a new report. S&P Global predicts that the real estate sector will expand by 5 to 7 percent in 2022. “We do not anticipate a significant disruption of the market, but rather that price growth could slow down and perhaps even reverse over the coming year, with price drops not exceeding 5-10 percent,” said analysts Tatsiana Lescova, S&P’s head of sector analysis, in a recent report. The prices of villas have exceeded their previous peaks, but the prices of apartments have fallen by 10-20 percent from their previous highs due to a historic oversupply. The Dubai property market continues to outperform the global market, with prices rising at a double-digit rate each year since 2021. Pre-sales are also at record highs.
The analysts came up with a few reasons why Dubai’s real estate market continues to perform well: · Foreign investors (including high-net-worth individuals) have contributed to sustaining strong demand, especially for high-end properties. The strong pre-sale activity in 2023 is in stark contrast to our earlier forecast that the market would stabilize. Dubai has been relatively resilient to the global economic slowdown, mirroring the resilience it demonstrated during the pandemic.
Dubai is well-positioned to benefit from a diverse economy. Dubai’s economy has done well since the COVID-19 pandemic, despite higher financing costs for corporations and persisting inflation, which remains below the world average. We expect Dubai’s economic growth to average 3 percent in 2022-24, following a recovery that saw average growth of 5 percent in 2021-22. The strong economic performance is likely to support a strengthening fiscal position, and its debt-to-GDP ratio is projected to continue declining, in our opinion. On the other hand, we anticipate a period of subdued global growth, as more indebted economies are impacted by higher, longer-term interest rates.
In 2024-2025, S&P expects growth to remain strong in the hospitality wholesale, and retail, as well as financial services sectors. Real estate, on the other hand, is expected to slow down over the next year-and-a-half after another robust year in 2023, according to S&P. Dubai’s population has grown by more than 2 percent over the past year, reaching 3.6 million people as of the September 2023 data from the Dubai Statistics Center. The country’s international visitor numbers continue to recover, with Dubai International Airport handling more than 41 million passengers during the first six months of 2023, more than double the number in the same period of 2019. Dubai’s international visitors are projected to reach 17 million in 2024, a full recovery in three years.
Disclaimer: The views expressed above are for informational purposes only based on industry reports and related news stories. PropertyPistol does not guarantee the accuracy, completeness, or reliability of the information and shall not be held responsible for any action taken based on the published information.
