Dubai’s property market is set to consolidate gains this year from a rebound that started in 2021, according to a report by S&P Global Ratings. Properties are relatively affordable with prices 25% to 30% below 2014’s peak, despite a significant uptick in 2021.
The report said Dubai had emerged from the global pandemic as a haven for wealthy people escaping lockdowns and for others drawn by the ease of getting vaccinated. The downturn that had shaved more than a third off property values had provided an additional lure.
“The market is set for a moderate increase in property prices, rents, and increased sales volumes this year,” said analyst Tatjana Lescova in the report.
The S&P report noted that the gross domestic product of Dubai was expected to rise by 2.5% in 2022 with stronger oil prices and a further 2% in 2023. The population was also forecast to rise 2% per year in 2022 and 2023.
Over the longer term, the report said the market should benefit from the increasing population and government initiatives including new visa rules, more liberal social laws, the shift to a Monday-to-Friday working week, and the relaxation of company ownership rules
As a result, developers’ revenue growth should accelerate over the next four to five years, tempered by a structural oversupply of residential properties and the delivery of new developments. There was an ongoing rise in transaction volumes and strong demand for off-plan properties, with villas outperforming apartments.