Activity is at levels never seen before – sales volumes recently hit a 10-year high - and the sentiment by end 2023 is increasingly positive. I have become a bit of a broken record over the past couple of years with my belief that Dubai’s graph is going to remain on an upward trend. To be fair, I have yet to be proven wrong.
Naysayers pop up around this time to suggest that Dubai’s unprecedented real estate boom is coming to an end. But that end keeps getting pushed back and I see little reason to be conservative about the outlook for the future. Here is what I think 2024 might look like.
Cooling interest rates
The Fed announced last week that interest rates in the US would be slashed 6 times across 2024. As a result, properties will become more affordable in the US next year, and as the UAE Central Bank moves in step with the Fed, this will create greater affordability in the UAE. One of the concerns voiced in 2023 is that certain properties - and even entire communities - have moved into steeper price brackets, leaving potential buyers priced out.
With interest rates getting cut, there will be easier access to finance for a larger segment of buyers. Those who may have been considering properties below a certain price point because of the huge jump in down payments and subsequent mortgage payments will find a greater range of buying options open to them.
There have been many rationalisations for the success that Dubai has seen over the past couple of years, framing it as a reaction to global events.
This shift will be felt most strongly at the lower end of the prime market, where buyers will find themselves in a better position to push their budgets for the property that they want. To me, this is one of the key indicators of a healthy market.
A gamble that’s going to pay off
The Wynn Resort in Ras Al Khaimah made waves when it was launched, as the first licensed gaming project in the UAE, and in the region. Towards the end of November, Dubai official threw its hat into the ring by announcing the construction of an island featuring three major Las Vegas hospitality brands – Bellagio, MGM and Aria.
It goes without saying that this is a huge announcement that will have a very positive impact on several industries connected to real estate and tourism. The tentative completion date of the island is 2026, so we can expect many exciting new developments to come.
Big plans for offplan
While we are on the topic of exciting developments, the offplan market in Dubai got a fresh burst of energy in 2023. Transaction levels have been on the rise – offplan accounted for a little over 50 per cent of all property transactions at the start of the year, and now accounts for around 70 per cent.
There has been a slew of launches in the third quarter alone, including new projects across Downtown, Dubai Hills Estate, and Jumeirah Golf Estates. Additionally, there have been launches in new master communities such as Oasis, and, of course, Palm Jebel Ali.
But in the past 12 months, I think it has become clear that Dubai is not coasting off its reputation as a safe haven post-Covid.
Projects are selling out almost quickly as they’re launching and activity in that sector will remain incredibly strong in 2024.
Successes of 2023
There were several records broken in 2023, both in terms of the volume of transactions and property values. Rents in particular have hit incredible highs on the back of rising demand.
As a company, we have broken many transactional records as well - over the course of the year, it was routine to have sales transactions taking place in the price range of $10 million to 30 million.
Our team of senior private client advisors achieved immense success on Palm Jumeirah and has also set a record for price per square foot in Bulgari. Our offplan team has been incredibly busy and closed a transaction in excess of Dh80 million.
There have been many rationalisations for the success that Dubai has seen over the past couple of years, framing it as a reaction to global events. But in the past 12 months, I think it has become clear that Dubai is not coasting off its reputation as a safe haven post-Covid.
The city has continued to strengthen its infrastructure and to create an environment that offers an enviable lifestyle to residents from every corner of the globe. And with the roaring success of the offplan market and exciting new projects that are coming up, 2024 is going to be another fantastic year for Dubai real estate.
