The real estate market in Dubai has reached a milestone and recorded a significant increase. The previous record from 2014 was surpassed, which also points to robust development in the coming years.
According to a report by the renowned real estate company Allsopp & Allsopp, the average property price in Dubai has risen to a nine-year high. Dubai has thus broken the previous record for the price per square meter from 2014. According to the latest data from the Data Hub for November 2023, the Property Monitor’s Dynamic Price Index (DPI) now stands at an average selling price of AED 1,257 per square meter.
This significant increase surpasses the 2014 record and shows a strong and stable upward trend in the Dubai real estate market. Lewis Allsopp, CEO of Allsopp & Allsopp, commented: “Dubai’s current 36-month real estate market cycle has not yet peaked. What we are experiencing is the continuation of a strong and stable upward phase. The year 2023 is the most active and best performing year in the Dubai real estate market since records began.”
Market dynamics due to more end users
Comparing the current market cycle with the peak in 2014, Allsopp emphasized the shift in market dynamics, driven by a higher number of end users, ensuring a more sustainable level of growth compared to the speculative rise in 2014 cited by investors.
The CEO also highlighted positive indicators that support the emirate’s growth trajectory, citing data from various sectors. “The Roads and Transport Authority reported an 8 percent year-on-year increase in Salik registrations for new cars, private schools in Dubai saw a 12 percent year-on-year increase in enrollment, and the number of telecom users in Dubai increased by 9.4 percent year-on-year.”
Looking to the future, Allsopp expressed confidence in the emirate’s continued growth. Especially with regard to the urban master plan 2040. “Dubai’s population has passed the 3.6 million mark and is growing by 3 percent per year. This is also a new record. The city is aiming for a population of 5.8 million by 2040, which indicates a sustained demand for real estate.”
Challenges in the Dubai market: Insufficient supply
Despite the positive trends, there are still challenges in the form of an undersupply. Allsopp emphasized that the market will remain undersupplied for the foreseeable future despite the efforts of property developers. “By the end of 2023, fewer than 50,000 new properties will be handed over, which is well below the net population growth in the same year. I can’t predict the future, but if 2024 passes without any natural disasters or events, the real estate market in Dubai will probably continue to flourish. After its recent all-time high, it will continue to set new records well into 2024.
