Real Estate

Market Update from Firas Al Msaddi, CEO of fäm Properties

Dubai's real estate market continues to exhibit remarkable resilience and growth, underpinned by two key drivers: sustained demand and the impact of inflation. These factors contribute to a robust and attractive market environment for both end-users and investors.

Sustained Demand

A primary force bolstering Dubai's real estate market is the persistent and robust demand. This demand effectively absorbs the available supply, a trend expected to continue as numerous off-plan projects approach completion. The handover phase for these projects is projected to commence significantly in Q1 2025, marking a critical period for the market.

Dubai's established reputation as a premier global destination attracts new residents, tourists, and both individual and institutional foreign investors. This steady influx is anticipated to maintain high demand levels. Even if demand slightly lags behind supply, any resulting imbalance is expected to be temporary and manageable in the medium term.

Impact of Inflation

Inflation is the second significant factor driving the market. As cash loses value globally, individuals increasingly seek to safeguard their wealth by investing in assets that offer protection against inflation. Real estate emerges as a preferred choice due to its tangible nature and relative ease of understanding. After conducting basic research and due diligence, many investors find real estate to be a secure and comprehensible asset class.

Properties in Dubai, which were built at lower costs in the past, are likely to appreciate in value as the cost of building new properties rises due to inflationary pressures on construction materials, logistics, and other related expenses. Consequently, property owners are keen to invest in real estate, recognizing that replacement costs will only increase in the future.

Current Market Dynamics

Dubai’s market for rental properties, ready-to-buy properties, and off-plan properties currently appears healthy. While the extraordinary capital gains seen over the past two years may not persist, steady and healthy growth is anticipated. This stability reflects the underlying strength of Dubai's real estate market and its adaptability to evolving economic conditions.

Market Performance

The combination of robust demand and strategic responses to inflation ensures that Dubai’s real estate market remains vibrant and attractive to a diverse range of investors. This dynamic interplay continues to position Dubai as a leading global real estate hub.

Recent data highlights the market's growth trajectory. The number of sales transactions in Q1 2024 (65,450) doubled the transactions of Q1 2023 (32,725) and tripled those of Q1 2022 (21,817). The value of sales transactions in Q1 2024 reached AED 186 billion, marking a 24% increase from Q1 2023 (AED 150 billion) and a 107% increase from Q1 2022 (AED 90 billion).

In summary, the combination of sustained demand and strategic responses to inflation ensures that Dubai’s real estate market remains a vibrant and attractive investment destination, solidifying its position as a leading global real estate hub.

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