With a reputation for being a global hub of luxury and innovation, the city’s ongoing transformation and the evolving preferences of tenants, Dubai’s real estate market is poised for a dynamic year.

Factors such as a resilient economy, government regulations, geopolitical stability, rising influx of professionals, and the city’s growing appeal as a haven for the wealthy have played a significant role in making Dubai a favoured destination for professionals and businesses alike. Add to that eco-friendly developments with greener and sustainable housing options and Dubai is soon becoming every person’s dream destination.

Property experts have hence predicted a 20 per cent increase in rents in prime Dubai residential areas. According to them, if net migration to Dubai continues to be higher than the rate that new homes are handed over, rental prices will be pushed upwards.

However, the rental graph can shift as more residents opt to buy rather than rent homes even as property becomes an attractive investment opportunity.

After a sharp increase by 23 per cent annually the first half of 2023, the upward trend appears strong, according to Ilnara Muzafyarova, head of Colife, a real estate management firm.

According to real estate consultancy Asteco, the Dubai rental market saw a gradual moderation in growth rate in the third quarter. There is a definite slowdown with rental gains at 3.0 per cent, 2.0 per cent, and 4.0 per cent for apartments, villas and offices over the three months, said Asteco.

Property Finder’s November data shows one-bedroom apartments witnessing the highest demand. Around 36 per cent of people were found to search for one-bedroom apartments, while 30 per cent looked for two-bedroom apartments, and 24 per cent for studios. For villas/townhouses, 42 per cent looked for three bedrooms, and 35 per cent searched for four-bedroom and larger options. Furnished homes were preferred by 66 per cent of tenants, but 32 per cent wanted unfurnished. For villas/townhouses, 51 per cent looked for unfurnished, and 48 per cent sought furnished listings.

While established neighbourhoods like Dubai Marina, Downtown Dubai, and Palm Jumeirah have been long-time favourites, developments such as Dubai South and Dubai Hills Estate offering a blend of modern infrastructure are emerging areas gaining prominence.

The city’s real estate market is closely tied to the city’s economic performance. GDP growth, job creation, business activities, economic diversification and the city’s ambition to become a global business and innovation hub have contributed to sustained demand for rental properties.

According to experts, the upward momentum in rents reflects the vibrancy of Dubai’s real estate market, with property values escalating alongside the operational high-rise buildings and property transactions surging.