Last year represented another exceptional period for the UAE’s real estate market, with both residential and commercial segments performing well throughout 2023.

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Noteworthy achievements included unprecedented transaction levels and the record-breaking sale of the UAE's most expensive penthouse at $136.2 million. Although Dubai stood out as a particular hotspot, reaching a peak of $1.46 billion in property business in a single day in April, it was encouraging to observe robust activity across all seven Emirates.

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While high demand is positive for the market, it exerts pressure on property prices. Dubai's average residential prices surged by 19.1 percent in the 12 months leading up to October 2023. This raises the crucial question: can Dubai's thriving real estate market maintain its competitiveness in 2024?

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Here are my insights...

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Robust Demand:

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In the initial three quarters of 2023, Dubai's real estate transactions saw significant increases in both value (36.7 percent) and volume (33.8 percent) compared to the corresponding period of the previous year. Data from the Dubai Land Department (DLD) revealed substantial growth in real estate investments, with over 80,000 investors registering more than 109,000 investments, totaling almost $76 billion – a year-on-year value increase of over 50 percent.

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Rental rates in Dubai also witnessed a 32.6 percent year-on-year increase in Q2 2023, according to analysts at ValueStrat. While the pace of increases is expected to ease in the coming 12 months, few experts predict a decline in rental prices in 2024. Whether you are looking to buy or rent property in Dubai, expect stiff competition throughout the year.

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Value Proposition:

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Despite strong demand and rising prices, Dubai continues to offer exceptional value for money compared to many other international property hubs. For instance, Monaco, the most expensive city on Knight Frank's 2023 list of prime residential property markets, offers just 17 sqm of space for $1 million. In contrast, the same investment in Dubai buys approximately 105 sqm of real estate, providing more than six times the space for the money.

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Dubai's real estate sector's value proposition has not gone unnoticed by international investors. Buyers seeking competitively priced, high-quality property in the emirate constitute a significant portion of the demand witnessed last year. It wouldn't be surprising if the gap between Dubai and locations like Monaco, Hong Kong, and New York narrows in 2024 – the question is, by how much?

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Wealth Migration:

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Dubai's real estate market's growing popularity has attracted an increasing number of high-net-worth individuals (HNWIs) in recent years. With a reputation for quality of life, luxury, and economic prosperity, Dubai has become a global wealth hub, home to over 68,000 millionaires. Last year, approximately 4,500 new millionaires moved to the UAE, making it the second most popular country for HNWIs after Australia.

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This trend of wealth migration to Dubai is expected to continue this year, sustaining demand for real estate, especially in the premium segment.

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In Conclusion:

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Dubai's real estate maintains superb value on the international stage, but with high demand and limited supply, predicting how long this situation will persist is challenging. The emirate's property sector has thrived since the global pandemic, and indications suggest this trend will endure.

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Analysts predict a doubling of the UAE GDP in 2024 to 4.8 percent, and Statista anticipates a compound annual growth rate (CAGR) of 3 percent in the real estate market from 2023-2028, reaching a market volume of $800 billion within the next five years.

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While Dubai's property sector appears likely to remain competitive in 2024, signs point to increasing demand during the year. Investors considering property acquisition in 12 months may find that the same value for money is not achievable as it is today. Thus, those contemplating real estate investment in Dubai may be prudent to act sooner rather than later.

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