Dubai’s Property Prices & Rents Will Continue To Rise In 2023, Here’s Why

According to a recent report, rent prices in Dubai are expected to rise by an average of 60% in 2023. This is due to rising demand in the area, fuelled by rapid population growth and investment opportunities. The news has been met with skepticism from many residents who fear that they will not be able to keep up with new rents.

The Continuous Rise in Rent Prices

New reports out of Dubai suggest that rent prices in the city are on the rise and with no signs of slowing down. According to recent research compiled by numerous private sources, rental costs for apartments in residential communities around Dubai have risen an estimated 36% over the last year alone and show no sign of abating anytime soon. The report also detailed how similar sharp increases had been observed this past month, as well as forecasts throughout 2023 predicting further steep rises in prices due to a combination of diminishing supply caused by construction surges prior to Expo 2020 and increased demand from ex-pats looking for short-term housing solutions outside hotels.

Real estate experts familiar with market conditions remain cautiously optimistic about potential correction ahead but agree that there is little evidence foreseeing any real change occurring within at least the near future if current trends continue unhindered. In response to these findings, government officials have called upon local developers who own large amounts of land across town to start building more affordable accommodation options. 

With the city’s economy booming and its infrastructure improving, more investors are looking to buy property in the city. This has resulted in the prices and rents of properties going up as investors compete for the best properties. The government has been investing heavily in the industry and providing incentives to investors, which has resulted in an increase in property prices and rents.

Finally, technology has also played a role in the growth of the real estate industry. With the advent of online real estate platforms, the property buying and selling process has become much easier, faster, and more efficient. This has made it easier for investors to purchase properties and has also encouraged more people to invest in the city.

Mitigating These Concerns

Many landlords have already started implementing advanced technologies such as AI-powered pricing systems, which make it easier for them to optimally price their properties each month depending on demand signals coming from the market. This further increases worries amongst tenants about affordability issues related to tenancy agreements going forward.

Real Estate Sales in Dubai

According to data from the Dubai Land Department, real estate transactions in the city increased and around 12 billion AED was spent on real estate. 

The number of transactions involving buyers from outside the UAE also increased significantly, with foreign buyers accounting for  75 percent of all transactions in 2022. This is an increase from 50 percent in 2021, indicating that the city is increasingly becoming more attractive to foreign investors.

The average price of a property in Dubai also increased by 9.5 percent in 2022, with the average price now standing at AED 1161 per square foot. This is an increase from AED 1026 per square foot. This indicates that the real estate market in Dubai is becoming increasingly competitive, with buyers increasingly looking for bargains.

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