Dubai’s Stunning Property Rebound Lifts Sales, Rents to Record

Dubai's property market staged an impressive rebound last year, setting a new record for total home sales and reaching unprecedented levels of rental prices. Real estate adviser Innovate Real estate Brokers reported that the city registered 90,881 residential transactions in 2022, while Ejari contracts, or home rental agreements, surged 11% from the previous year, reflecting the city's growing population. IRE's Managing Director Mr. Stephen Daramola attributes the success to the increasing supply of new homes and robust demand. Unlike the rest of the world, where interest rates and a gloomy economic outlook have led to plummeting property values, Dubai's property market has experienced an upswing due to an influx of Russian investors safeguarding their wealth after the invasion of Ukraine, bankers fleeing strict lockdowns in Asia, Israeli investors, crypto millionaires, and hedge fund executives. The average annual rent for villas and apartments rose significantly by about 25% and 27%, respectively, to 282,150 dirhams and 95,168 dirhams, while the average price of apartments and villas also increased by 9% and 12.8%, respectively. IRE predicts that the market may slowly taper off this year, barring a sudden return of Chinese investors, who have historically been interested in mid-scale investment properties, compared to the luxury end of the market favored by Russian buyers. The city is constructing around 70,000 homes, which is expected to ease the pressure on rents and prices. Analysts predict that rental rates will moderate significantly this year, particularly in some of the core areas. While last year's rental rate increases were not sustainable, tenants are starting to move to neighborhoods they had not previously considered.