Property prices in Dubai are going to continue rising for at least the next two to three years, experts have told The National.
The cost of renting in the emirate is also likely to keep going up during the same period, as the number of people seeking to buy or rent outstrips the volume of available properties.
A new report issued by ValuStrat management consultancy says almost 27,000 new homes were completed in 2024 – which the firm says is the lowest figure for six years.
Meanwhile, the emirate's population continued to grow, meaning demand was significantly outstripping supply. The ValuStrat report showed there were 20,066 new apartments completed last year, compared to 6,891 villas.
Part of the problem is not enough new properties are being built compared to apartment buildings, according to one expert. The ValuStrat report estimates that 118,401 apartments and 28,351 villas and townhouses are under construction, with a promised handover by 2028.
“There is a distinct lack of houses being built compared to apartments,” said Mario Volpi, head of brokerage at Novvi Properties. “It's easier to build a tower and have everything in it than have it all spread out in individual units like townhouses or villas.
“The number of houses handed over [in the report] is quite low. For prices to start softening then we need to have at least double that number.”
He suggested it would be 2027 at the earliest before supply caught up with demand and the cost of renting or buying a property subsided.
Another expert told The National it came down to a simple case of supply and demand.
"The market is telling us we do not have enough housing supply to meet the rising number of new residents moving to the emirate, with the population now above 3.8 million," said Matthew Green, head of research for real estate firm CBRE Mena.
"Prices and rents are expected to continue rising during 2025, but at a slower rate of growth than was recorded during 2023 and 2024.
"However, as the number of new residential deliveries increases through the period 2026-2028, we expect to see a more balanced supply and demand equation emerge, leading to some moderation of pricing growth from the current high levels, particularly for areas with significant unit completions."
This was also reflected in what he described as proxy indicators of residential demand such as increasing trips through Salik gates, mobile phone registrations, and DEWA connections.
"However, the post Covid boom in new off-plan sales launches has significantly swelled the development pipeline, with around 40-45,000 new units expected to be delivered in 2025, with annual deliveries then moving much higher again during the period 2026-2028," said Mr Green.
"This is likely to help moderate growth in rental and sales rates in the longer term, although for now demand continues to outweigh supply."
The emirate's population stands at 3.83 million, with growth projected at 3.6 per cent annually until 2030. The ValuStrat report also said Dubai's population grew by 170,000 people in 2024.
Other findings in the study showed the average cost of buying an apartment grew by 23.6 per cent, with villas increasing by 31.6 per cent. The cost of renting also grew with apartments rising by 13 per cent and villas going up by 5.8 per cent.
“We have a rising population but we don't have the supply [of properties] to match it,” said Haider Tuaima, director and head of real estate research with ValuStrat.
“Rents have already more than doubled since the pandemic and definitely have surpassed the previous peaks in 2014,” said Mr Tuaima. He added that current projections show supply could finally catch up with demand by 2028.
His reasoning was based on a pipeline of almost 150,000 properties set to be handed over to owners by 2028. Of these properties, 12 per cent were expected in the city's Jumeirah Village Circle (JVC) area. Another 8 per cent were due for Business Bay, followed by 5 per cent in Jumeirah Lake Towers (JLT), according to the report.
The National contacted number of property developers in the emirate, but only Damac was prepared to comment.
“Dubai’s rapid population growth and its position as a global hub for investment continue to drive strong demand for housing,” said Mohammed Tahaineh, general manager of projects at Damac.
This meant the property sector was having to rise to meet this demand by looking at “innovative solutions” involving advanced construction technologies and strategic planning.
Another expert said UAE residents could expect to see the cost of renting or owning a property increasing this year but perhaps not as much as first feared.
“With over 72,000 units scheduled for handover in 2025, the market will see a significant increase in supply, helping to balance the demand that has driven up property prices in recent years,” said Christopher Cina, development sales and consultancy director at Betterhomes. “A moderate increase in both rent and sales prices of less than 10 per cent is expected as the supply pipeline builds.”
BULKWHIZ PROFILE
Date started: February 2017
Founders: Amira Rashad (CEO), Yusuf Saber (CTO), Mahmoud Sayedahmed (adviser), Reda Bouraoui (adviser)
Based: Dubai, UAE
Sector: E-commerce
Size: 50 employees
Funding: approximately $6m
Investors: Beco Capital, Enabling Future and Wain in the UAE; China's MSA Capital; 500 Startups; Faith Capital and Savour Ventures in Kuwait
Virtuzone GCC Sixes
Date and venue Friday and Saturday, ICC Academy, Dubai Sports City
Time Matches start at 9am
Groups
A Blighty Ducks, Darjeeling Colts, Darjeeling Social, Dubai Wombats; B Darjeeling Veterans, Kuwait Casuals, Loose Cannons, Savannah Lions; C Awali Taverners, Darjeeling, Dromedary, Darjeeling Good Eggs
Polarised public
31% in UK say BBC is biased to left-wing views
19% in UK say BBC is biased to right-wing views
19% in UK say BBC is not biased at all
Source: YouGov
ICC Awards for 2021
MEN
Cricketer of the Year – Shaheen Afridi (Pakistan)
T20 Cricketer of the Year – Mohammad Rizwan (Pakistan)
ODI Cricketer of the Year – Babar Azam (Pakistan)
Test Cricketer of the Year – Joe Root (England)
WOMEN
Cricketer of the Year – Smriti Mandhana (India)
ODI Cricketer of the Year – Lizelle Lee (South Africa)
T20 Cricketer of the Year – Tammy Beaumont (England)
COMPANY%20PROFILE
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Skoda Superb Specs
Engine: 2-litre TSI petrol
Power: 190hp
Torque: 320Nm
Price: From Dh147,000
Available: Now
COMPANY%20PROFILE
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SERIES INFO
Schedule:
All matches at the Harare Sports Club
1st ODI, Wed Apr 10
2nd ODI, Fri Apr 12
3rd ODI, Sun Apr 14
4th ODI, Sun Apr 16
UAE squad
Mohammed Naveed (captain), Rohan Mustafa, Ashfaq Ahmed, Shaiman Anwar, Mohammed Usman, CP Rizwan, Chirag Suri, Mohammed Boota, Ghulam Shabber, Sultan Ahmed, Imran Haider, Amir Hayat, Zahoor Khan, Qadeer Ahmed
Zimbabwe squad
Peter Moor (captain), Solomon Mire, Brian Chari, Regis Chakabva, Sean Williams, Timycen Maruma, Sikandar Raza, Donald Tiripano, Kyle Jarvis, Tendai Chatara, Chris Mpofu, Craig Ervine, Brandon Mavuta, Ainsley Ndlovu, Tony Munyonga, Elton Chigumbura
Company Fact Box
Company name/date started: Abwaab Technologies / September 2019
Founders: Hamdi Tabbaa, co-founder and CEO. Hussein Alsarabi, co-founder and CTO
Based: Amman, Jordan
Sector: Education Technology
Size (employees/revenue): Total team size: 65. Full-time employees: 25. Revenue undisclosed
Stage: early-stage startup
Investors: Adam Tech Ventures, Endure Capital, Equitrust, the World Bank-backed Innovative Startups SMEs Fund, a London investment fund, a number of former and current executives from Uber and Netflix, among others.
57%20Seconds
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MATCH DETAILS
Juventus 2 (Bonucci 36, Ronaldo 90 6)
Genoa 1 (Kouame 40)
The Old Slave and the Mastiff
Patrick Chamoiseau
Translated from the French and Creole by Linda Coverdale
Labour dispute
The insured employee may still file an ILOE claim even if a labour dispute is ongoing post termination, but the insurer may suspend or reject payment, until the courts resolve the dispute, especially if the reason for termination is contested. The outcome of the labour court proceedings can directly affect eligibility.
- Abdullah Ishnaneh, Partner, BSA Law
Moon Music
Artist: Coldplay
Label: Parlophone/Atlantic
Number of tracks: 10
Rating: 3/5
The specs
Engine: 2-litre 4-cylinder and 3.6-litre 6-cylinder
Power: 220 and 280 horsepower
Torque: 350 and 360Nm
Transmission: eight-speed automatic
Price: from Dh136,521 VAT and Dh166,464 VAT
On sale: now
Dubai Bling season three
Cast: Loujain Adada, Zeina Khoury, Farhana Bodi, Ebraheem Al Samadi, Mona Kattan, and couples Safa & Fahad Siddiqui and DJ Bliss & Danya Mohammed
Rating: 1/5
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
The%20specs%20
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Teams in the EHL
White Bears, Al Ain Theebs, Dubai Mighty Camels, Abu Dhabi Storms, Abu Dhabi Scorpions and Vipers
The specs
Engine: 6.2-litre V8
Transmission: ten-speed
Power: 420bhp
Torque: 624Nm
Price: Dh325,125
On sale: Now
