Dubai: A growing hub for the Real estate?market

The UAE’s real estate market especially in Dubai has witnessed unprecedented demand over the last four years. The demand resulting in substantial capital value growth and rental increase across various sectors.

According to the knight frank report the UAE’s appeal as a property investment destination. It is driven by its pro-business environment, attractive climate, safety and rule of law. The introduction of residency visa options during the pandemic has further enhanced its attractiveness alongside the availability of luxurious and affordable beachfront properties that have captured the interest of both global and regional high net worth individuals (HNWIs).

Globally, HNWIs particularly those with a personal net worth exceeding $20 million express significant interest in real estate investment in the UAE. The report indicates that 49% aim to invest within the year with 30% planning to do so within the next 2-5 years. East Asians exhibits strong enthusiasm with 74% likely to invest within the next 5 years and 37% aiming for investments in 2024 specifically.

Real estate in the UAE particularly in Dubai offers attractive yields for investors averaging 6.3% for single units for apartments. Residential values have seen a considerable increase rising by 9% in the 12 months to the end of Q1 2024 and by an impressive 39% since Q1 2020. The average home prices in Dubai are now 16% higher than during the last market peak in 2014.

For wealthy individuals worldwide the top reason to invest in the UAE is its perceived profitability cited by 39% of respondents. And 26% view the UAE as an appealing spot for tourism and entertainment. Expatriates particularly those in the GCC also find the UAE attractive for investment 44%, emphasizing the high quality of life especially in healthcare, education, and personal activities.

Among GCC based expat HNWIs a 76% aim to purchase homes in the UAE, with approximately a third considering investments in healthcare (34%) and branded residences (28%). globally while residential real estate remains the most likely target class (54%), branded residences emerge as the second most preferred (41%) followed by office (36%).

The report highlights that 58% of global HNWIs express a desire to purchase residential real estate in the UAE rising to 70% among GCC-based expat HNWIs. Dubai, especially properties worth $10-15 million is highly sought after making it the busiest market for homes priced over $10 million. Notably among regions East Asians, including China, Hong Kong, and Singapore, show the most interest in Dubai real estate.

Dubai is globally recognized as a luxury destination boasting 28,000 5-star hotel rooms and 14 Michelin-star restaurants. With over 154,000 hotel keys it surpasses cities like London and New York in accommodation offerings. Its popularity is evident with TripAdvisor naming it the top tourist destination in both 2023 and 2024, with hotel occupancy averaging 77.4% in 2023.

Among GCC-based expats, 56% express interest in purchasing real estate, highlighting Dubai's strong brand allure. Looking ahead, the residential market outlook in Dubai remains promising with 261,243 homes currently under construction or announced for delivery by 2029, exceeding historic completion levels. And Cash buyers continue to dominate the market accounting for 82% of transactions in 2023, shielding it from rising borrowing costs. Dubai has indeed emerged as the busiest market for homes priced at US$10 million?and?above.