Experts in the field of real estate have speculated that a housing shortage and subsequent increase in rents are being fueled by Dubai’s rapid population growth and the subsequent flood of European property investors. Due to the city’s increasing popularity, new plots are selling out quickly, while rising prices have made many residents reluctant to leave for fear of paying even more to stay put.
Land in Dubai’s most sought-after areas has seen price increases of double or more during the past five years. Executives in the industry argue that prime real estate sites like Jumeirah Bay are extremely rare in the emirate. The increased demand for real estate across the emirate in the post-pandemic period has resulted in a jump in the selling prices of plots from both local and foreign investors and developers as well as end-users who desire to build their own dwellings.
Luxury properties in Dubai are now in scarce supply. Several regional builders are keen to unveil their newest projects to an interested public as a result of the recent boom in the pre-construction business. As a result of their demand, rents in prime areas have risen. The construction business has seen an influx of workers from other countries. Since the first of the year 2023, these constructors have collaborated with brokers, contractors, and consultants situated in Dubai. It was the largest residential land transaction in Dubai’s history when Properties paid Dh690 million for three coastal plots in Dubai Marina.
Supply is particularly tight in developed center locations due to a considerable influx of new inhabitants and wealthy foreigners. Rising home prices have led many to consider other options, such as purchasing property and building their own custom homes rather than buying from a builder. There are three main types of land buyers: those who hope to cash in on rising prices, those who want to build and resell projects on the land, and those who want to build their own homes.
The situation is critical in certain areas. Land for construction, for instance, is in short supply near Jumeira Bay. He also noted an upward trend in land prices between 2021 and 2023 in areas such as Al Barari, Al Wasl, and Umm Al Sheif. He stated that the prices of some plots on Jumeirah Bay and Palm Jumeirah have increased by 400%.
Real estate near major attractions, such as Dubai Mall, is also in high demand. Meydan and Dubai Land are in high demand for plots to build neighborhoods on, especially for villas and townhouses. A proptech firm based in Dubai has reassured investors about a swift recovery in the market while dismissing a recent report about a precipitous drop in property deals in April, which has apparently raised red flags about the sustainability of the current bull run.
The seasonality and historical data should be taken into account by market analysts and investors when assessing the Dubai real estate market. Investors should avoid getting too worked up over temporary price swings and instead keeps their attention on the market’s solid underlying conditions, we warn. Realiste is an artificial intelligence (AI)-driven real estate investment platform.