What is the direction of real estate prices in the UAE by 2024?

Home prices in the UAE are expected to continue rising due to increasing buyer demand, but there could be a turnaround in the second half of 2024 that could affect the luxury market, according to developers and analysts.

In Dubai, the commercial and tourist hub of the Middle East, average home prices are expected to rise by 5 to 7 percent, while Abu Dhabi prices are expected to increase by 3 to 5 percent, said Gaider Tuaima, director and head of real estate research at ValuStrat, The National.

"In the next three to four months, the market will remain active in terms of transactions, price appreciation and rentals," Mr. Tuaima said. However, by the middle of next year, perhaps in the summer, we may see an inflection point where a turn in the curve is possible, and if that happens, it will affect primarily the luxury market," he said. "Whether that can stabilize this market or whether a price correction will begin is something, we don't know. But it is very likely that we will see some changes in the direction of the luxury market. "

The UAE real estate market has remained strong this year, with transaction growth in both Dubai and Abu Dhabi due to government programs such as residency permits for retirees and remote workers, as well as overall economic growth. According to the Dubai Land Department, 116,116 new real estate transactions worth about Dh429.6 billion (US$117 billion) were recorded in Dubai in the first nine months of 2023. Total transaction volume in the emirate was up 33.8 percent year-on-year, with values rising more than 36.7 percent over the period.

Even in Abu Dhabi, real estate transactions are on the rise thanks to increased demand from domestic and regional investors. There were 10,557 real estate transactions worth Dh46.33 billion in Abu Dhabi in the first half of 2023, the emirate's municipal services and transportation agency said in July, citing data from the Department of Municipalities and Transportation.