Have Dubai property prices reached their peak?

There are strong signs that the market is maturing, say experts

The outlook for the coming year is further price increases but at a slower rate. Victor Besa / The National
Dubai’s residential property prices are expected to moderate this year, but the market shows no signs of letting up for the foreseeable future, analysts have said.

Favourable interest rates and policies that encourage long-term residency have sustained the market at a time when some thought it might run out of steam.

The outlook for the coming year is further price increases but at a slower pace, according to Haider Tuaima, head of real estate research at Valustrat.

“There will be growth, but at a much lower rate,” Mr Tuaima told The National.

Stringent developer payment plans, restrictions on forward sales and government regulations have effectively mitigated speculative ‘flipping’ and subsequent value inflation
John Allen, chief executive of valuation and advisory at Asteco

“At the moment, it’s double-digit growth and we think is going to come down to single-digit growth – between 5 per cent and 7 per cent.”

Last year set new records for value and volume of sales. In September, average prices surpassed the previous peak set 10 years earlier.

The ValuStrat Price Index, which analyses changes in property values, shows property values grew by 19.9 per cent in 2023.

Discovery Gardens (prices up 26.4 per cent), The Greens (24.3 per cent), Motor City (20.7 per cent) and Town Square (19.5 per cent) were the best-performing areas for apartments.

Jumeirah Islands (32.2 per cent), The Palm Jumeirah (31.9 per cent), Dubai Hills Estate (30.6 per cent) and Mudon (27.2 per cent) recorded the largest increase for villas.

Property prices in Dubai’s residential segment are expected to continue to ease in 2024 “as savings are being exhausted and pent-up demand is being absorbed”, real estate consultancy Asteco said in its outlook report for 2024.

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Source : National News