Dubai Rental Prices Projected to Increase by 20% in 2024
Prime residential areas in Dubai are set to experience a significant rent increase of up to 20% in 2024, following an impressive growth estimated between 23-30% in the previous year. Industry experts attribute this continued upward trend to multiple factors, including heightened investor interest, a surge in professional influx, population growth, and Dubai’s burgeoning reputation as a destination for affluent individuals.
The experts note that if the rate of new arrivals to Dubai exceeds the pace of new housing completions, this imbalance will continue to exert upward pressure on rental rates. Key influences on the rent trajectory for 2024 include a shift in resident preferences towards homeownership over renting, and the growing perception of real estate as a lucrative investment.
Dubai luxury property rental. If net migration to Dubai continues to be higher than the rate that new homes are handed over, it will continue to put upward pressure on rental prices, experts say. — KT file
Ilnara Muzafyarova, the head of real estate management firm Colife, reports that in the first half of 2023, rental prices soared by 23% and are projected to reach an approximate 30% increase by year-end. Muzafyarova anticipates a 20% rise in short-term rentals (up to six months) compared to 2023, and a 15% increase for long-term rentals (over six months). This is supported by a 15% rise in apartment prices from mid-2022 to mid-2023.
In November 2023, S&P forecasted a 5.0% to 7.0% rise in house prices for 2024. Tatiana Leskova, associate director at S&P, observes no sign of a slowdown in Dubai’s real estate prices this year. CBRE analysts report that since January 2020, Dubai’s rents have climbed by roughly 42%, with house prices increasing by about 33%. Villa rents mirror this trend, averaging $88,400 annually, marking a 19.2% increase as of November.
The ongoing rise in rents is seen as a reflection of Dubai’s dynamic real estate market, characterized by soaring property values, burgeoning high-rise developments, and a spike in property transactions. Colife recorded a significant 21.2% growth in monthly income, reaching $2,970 over the past year for a one-bedroom unit in Dubai Marina. In 2024, owners are expected to see even higher returns, around $3,415 per month.
With Dubai’s continuous draw of global professionals and its expanding population, experts foresee a persistent demand for residential spaces. Real estate consultancy Asteco observed a slight moderation in the rental market’s growth rate in the third quarter, with a more measured increase in rental gains. Property Finder’s November data highlights a high demand for one-bedroom apartments, with a notable preference for furnished homes.
As of July 2023, Dubai’s population stood at 3,604,030, up from 3,515,264 the previous year. The city’s Development Master Plan projects a population growth to 5.8 million by 2040.
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