Working on the frontlines of Dubai’s soaring real estate industry, I have witnessed firsthand the city’s uncanny ability to defy expectations, even in the face of major challenges.
This summer has been the perfect example – despite the intense heat and many thousands of people travelling for holidays, the emirate’s rental market has demonstrated an extraordinary resilience that should not be overlooked.
One helpful trend has been that summer is often the period when families relocate from overseas to Dubai, and this has given an extra flurry of rentals activity as parents get ready for their kids to start school in September. In fact, so many people are coming to live in the emirate that getting a first-choice school placement is becoming increasingly difficult.
Then there’s the overall surge in Dubai’s population – a 4% increase year-on-year – which means it is on track to meet the set target for 2040 population growth. The Dubai Population Clock reveals that the city now boasts over 143,000 more permanent residents than it did just a year ago. That alone is a sit-up-and-take-notice figure.
Sustained requirement for rental properties
This influx of new residents has created a sustained requirement for rental properties, ensuring a steady flow of tenants across the emirate. Of course, this is also good news for the real estate market in general, as many of these renters will become future buyers and investors.
But it's not just the newcomers who are bolstering the market. Many existing tenants are opting to renew their leases, finding comfort and stability in the communities they have come to call home. Areas such as Dubai Marina, Downtown Dubai, and Jumeirah Village Circle continue to be popular choices, with a high number of rental renewals, as highlighted in the latest haus & haus Market Reports for Q2 2024.
While summer is not considered a slow period for leasing in the industry, the past few months have been particularly remarkable for our leasing department. In July, we achieved the highest revenue in our 11-year history, coupled with a 28.15% increase in the number of deals compared to the same month last year.
Golden opportunity to invest
Rental yields have consistently stayed above 7% since March 2023, and despite an increase in supply, rental prices have continued their upward trajectory, underscoring the market's resilience.
The average price per square foot has also seen significant growth, rising from AED 63 in July 2023 to AED 75 in July 2024. This reflects not only the strong demand but also the enduring appeal of Dubai as a global hub for business, tourism, and lifestyle.
As an investor, these indicators should instil a high level of confidence. The stability in rental yields and the continuous increase in demand are clear signs of a thriving real estate landscape. Dubai’s ability to attract and retain residents, coupled with its strategic location and world-class infrastructure, makes it a compelling choice for long-term investment.
Bright outlook
As we move into the cooler months, the outlook for Dubai’s leasing market remains bright. The winter season traditionally brings a surge in activity, with even more new expats making Dubai their home and more investors recognising the benefits of becoming long-term landlords.
In my view, Dubai’s real estate market is not just resilient; it is adaptable, evolving in response to both global trends and local dynamics. The city’s commitment to growth and innovation ensures that it remains at the forefront of global real estate, offering opportunities that are hard to find elsewhere.
For investors, the message is clear: Dubai is not just a safe bet; it’s a smart one. The combination of strong rental yields, rising property prices, and a growing population creates an environment ripe for investment.
And as we continue to see new developments and infrastructure projects coming to fruition, the potential for returns is only set to increase.
