In Dubai, buying and selling a property valued at $2 million is more cost-effective compared to cities like London, Mumbai, or Paris.

Dubai’s market for premium residential real estate expanded at the fastest rate among all global cities in 2023 and is expected to outperform nearly all major cities in 2024 as it continues its strong run.

“Dubai has been a global leader for capital value appreciation in recent years. Prices have increased by 17.4 per cent in 2023. However, it is likely that this rate of growth will slow over the course of 2024 to around 4 to 5.9 per cent as we see a return to a more ‘normal market’”, said Jelena Cvjetkovic, director, global residential real estate consultancy Savills.

Dubai, which will gain from increases in high-net-worth populations, will be the second fastest growing market in 2024, behind Sydney, despite slower growth.

Despite a slowdown in growth to 5.6% in the second half, Cvjetkovic noted that the 17.4% capital value increases were more than seven percentage points higher than the market in second place.

In 2023, Dubai’s capital value appreciation surpassed that of Mumbai, Bangkok, Tokyo, Sydney, Shanghai, Madrid, Barcelona, Geneva, Singapore, and other cities.

Due to the continued influx of wealthy people, the emirate remains a popular destination for prime residential real estate. In the last two years, 9,500 millionaires are thought to have settled in Dubai.

Competitively priced

Savills projects expanded in Dubai’s prime real estate market between 4 and 5.9% in 2024, which was second fastest growth rate after Sydney’s 8 to 9.9%.

The fact that 2024 is election year adds another degree of uncertainty to the picture. Under these conditions, the real estate market will benefit greatly from the political and economic stability that Dubai and the UAE provide.

According to Savills, the Dubai prime market is still reasonably priced by international standards, at $850 per square foot. It also offers a warmer climate, a relatively easy visa application process, and a comparatively low cost of living, all of which continue to draw both domestic and foreign buyers.

After Lisbon, Berlin, and Singapore, Dubai was one of the top four cities in terms of growth in the prime residential rental value. Dubai continues to have more expensive rents than many other cities, including Bangkok, Mumbai, Sydney, Madrid, Kuala Lumpur, Beijing, and Barcelona. However, rents are less than in many other major cities, including New York, Hong Kong, Los Angeles, Singapore, Paris, Geneva, and Amsterdam.

“Dubai stands out as another high-yielding city by world city standards, with returns of 4.8 per cent. Prime yields here have moved in by 40 bps in the last year, during a period in which capital values rose by 17.4 per cent and rents by 8.9 per cent. We can expect to see yields move in further in Dubai this year as capital values growth is forecast to continue to outpace rent rises,” Cvjetkovic added.