MARKET OVERVIEW FOR 2024 - AN ECONOMIST POINT OF VIEW
Daniel Jevaux
Real Estate, Yacht, Jet & Investments Consultant | Real Estate Developer | I help Families and Individuals with USD10MM+ Net Worth with their Investments and Luxury Assets | Miami - Dubai - Floripa
The year is just a few days away, and many are wondering what will happen in 2024 with the real estate market. Here are my predictions:
Now allow me to expand this analysis, especially in the markets where I work directly helping Brazilian investors, Miami and Dubai.
Miami
The United States Central Bank has already indicated that it will begin reducing interest rates. Some market speculation points to 6 cuts throughout 2024, but the truth is that no one - not even the FED itself - can define exactly how much interest rates will fall. But one thing is certain, they will fall.
The impact of this on the real estate market is to make properties more accessible to consumers, especially middle-class and low-income consumers, who rely heavily on credit.
To give you an idea, with the current interest rate, a person who can only pay $2,000 a month can finance a property worth $330,000. If the interest rate drops by 2 percentage points, he will be able to finance, with the same monthly payment, a property worth $411,000.
The question, however, is: what will he actually buy?
Miami's apartment inventory remains extremely low, leaving few possibilities for buyers. This fact alone is enough to show that property prices will not fall. An increase in demand will cause property prices to rise again.
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The same pattern repeats itself for the inventory of available homes. October 2023 ends with availability 14% lower than in 2022, justifying the stability and growth in prices for 2024.
Investing in real estate, especially apartments, at this time, is a winning strategy in the short, medium and long term.
Dubai
In Dubai the perspective is very similar. Conflicts in Asia and Eastern Europe along with socio-economic changes in Europe have led more people to move to the United Arab Emirates.
For the next 20 years, the government's expectation is that Dubai's population should grow by around 2.5 million inhabitants. Considering an average number of 3 people per family in Dubai, there is a projected demand for 40,000 new properties per year to supply the immigrant population.
The supply, however, is 25-30 thousand units per year for the next few years. There are not enough properties to meet the market and the result of this is only one: an increase in prices.
Investing in properties in Dubai, especially in areas close to entertainment and business centers is a sure bet over a 5-year horizon, especially off-plan properties.
Digital Marketing in Luxury ?? ? Real Estate | Fashion | Hospitality ? Data→Insights→ROI ? SEM, Social & Ecomm ? DMI Certified CDMP
11 个月Well, the Dubai side of the forecast hinges upon the assumption the UAE will not find themselves drawn into any major 'kerfuffles' in the region. Which they have insofar avoided, true... I mean, correct me if I'm wrong, but didn't the investment climate look quite promising for Beirut as well before comparatively recent developments pertaining to their disagreement with a certain Israeli country? I support you on DXB demand likely being there for the next 5 years. But a 5-year planning horizon seems a tad short for Dubai, as the realistic property yields are at about 8%; let's even round that up to 10%, which means about 10 years just to recover the investment. Again, correct me if I'm wrong numbers-wise - this is just what I typically heard from the clients' side while working in Digital Marketing here. Other than that, a bit surprised about Miami's continued low supply of residential property; the place was like a big construction site back in mid-2000's as per how I remembered it. -) Plus the relatively new projects like Edgewater... though they seem to cater to 'upmarket' for the most part?