Dubai to rank among the world’s best-performing property markets in 2024
Dubai’s property market is expected to make significant gains once again this year, capitalising on the momentum generated by its record-breaking performance in 2023.
The forecast is one of the highlights of Savills’ latest Prime Residential Index: World Cities report, which was published in February.
In the face of global economic headwinds, Dubai's real estate sector not only maintained its momentum but also enjoyed strong capital value appreciation in 2023, highlighting its growing appeal to investors.
According to the index, Dubai's prime residential market reported impressive capital value growth of 17.4% over the year, with a notable 5.6% increase in the latter half alone.
Value increases matched by record sales results
The Dubai Land Department (DLD) revealed earlier this year that Dubai recorded 166,400 property sales in 2023, marking a 36% increase on 2022 figures. The total value of these transactions reached AED634 billion (US$172 billion), up 20% year on year (YoY).
Highlighting Dubai’s growing appeal to international investors was the fact the total value of real estate investments increased 55% YoY to reach AED412 billion, on the back of 157,798 transactions made by 113,655 investors. The latter number marked a 20% increase on 2022 figures, with non-resident investors comprising 42% of this group.
According to Savills, Dubai’s growth trajectory places it at the forefront of global cities surveyed for the Index, with its strong performance underpinned by its relatively competitive pricing—$850 per square foot—and a host of other appealing factors, including the emirate’s relatively low cost of living, simplified visa process, and favourable climate, all of which continue to draw a diverse mix of buyers from across the world.
Dubai outperforms global rivals
To put Dubai’s stellar performance into context, capital values across the 30 international cities surveyed for the report – which included London, New York, Los Angeles, Tokyo, Sydney, Singapore, Hong Kong and Paris – rose by an average of just 2.2% in 2023, with rental growth also outpacing capital value increases.
Underperforming markets included Hong Kong, where prime residential prices declined by 3.7% in 2023 and are forecast to fall by up to 10% in 2024. Still the city maintained its ranking as the world’s most expensive market last year, with properties selling for an average of $3,970 per square foot, further highlighting Dubai’s relatively strong value equation.
Other underperforming cities, including New York and San Francisco, faced their own economic and sector-specific challenges, further highlighting Dubai's robustness and appeal to international investors seeking stability and growth.
Market poised for further growth in 2024
Looking ahead, Savills is cautiously optimistic about the global prime residential market, with average prices forecast to rise by just 0.6% YoY across the 30 cities in 2024.
However, Dubai, alongside Sydney, is expected to buck this trend, with capital growth expected in the range of 4% to 5.9% in 2024. While this represents a moderation in the rate of growth compared with 2023, the trend reflects a shift towards more sustainable levels after the rapid appreciation seen in the emirate in recent years.
As the world navigates inflationary pressures and political uncertainties, Dubai's real estate sector continues to offer a compelling proposition for investors. The market continues to offer strong value compared with other major cities, while the city’s world-class lifestyle, rapid population growth, and strong economic outlook means it is well-positioned to maintain the momentum built up in recent years and quickly adapt to evolving market dynamics.
As such, Savills says Dubai is well placed to cement its status as a global city of choice for savvy investors in 2024 and beyond.