Dubai’s Property Market Shifts to Sellers

Dubai’s Property Market Shifts to Sellers’ Advantage as Investors Reap Up to 200% Returns from 3-Year Price Surge

Dubai’s residential market is increasingly becoming a seller’s market as property owners seek to capitalise on the gains during the three-year price rally.

Industry insiders indicate that the property price rally is slowing down, with growth expected to plateau shortly. This is prompting some investors to sell and invest in new, upcoming areas that could offer better returns.

Property prices in Dubai have surged multiple times, surpassing the 2014 peak last year due to unprecedented demand in the post-pandemic period.

Interestingly, buyers who purchased property during the pandemic year have seen their assets’ prices appreciate by up to 200 per cent, and many are now becoming sellers to take advantage of the gains achieved over the past few years.

According to a study by Betterhomes, sellers are currently in an advantageous position, capitalising on a surge in property transactions and escalating prices driven by heightened buyer demand.

Managing director of Betterhomes, Louis Harding, said, “One of the key benefits for sellers in this rapidly expanding market is the potential for a lucrative return on investment, with property owners currently enjoying favourable rates. Additionally, selling property in Dubai offers zero capital gains or property taxes. The rapid growth in Dubai’s population further amplifies property demand and prices, creating an advantageous landscape for sellers, particularly in areas with limited supply.”

The top-performing areas in terms of returns are Downtown, District1 MBR, Jumeirah – including communities like Bulgari, La Mer, Nikki Beach, MJL, and private Jumeirah villas – Dubai Hills, Palm Jumeirah, and DIFC.

Looking ahead to 2024, Mayed Alrashdi, a research analyst at Emirates NBD, said the emirate’s property market ended 2023 on a resilient note, achieving significant milestones even as interest rates peaked, driven by population growth and the influx of high net-worth individuals.

However, he anticipates that Dubai’s real estate market could face some challenges in 2024, including continued high-interest rates, declining affordability for the average household, and an increased supply of new units.

He added that the impact of high interest rates last year was reflected in a 7 per cent year-on-year decline in the total value of mortgage transactions to Dh125 billion.

“The rapid price growth, coupled with the high-interest rate environment, has affected housing affordability for the average household. The anticipated increase in supply, comprising 41,500 apartments and 18,500 villas in 2024, should help to stabilise residential real estate prices this year,” he added.