Investment Opportunities in Dubai Real Estate: Relevant Tendencies

11:53 pm  |  24.11.2023

The United Arab Emirates (UAE) stands out as a premier destination for foreign nationals seeking real estate investments. Dubai, in particular, competes vigorously with the capital, Abu Dhabi. Despite a real estate market slump during the 2019-2021 COVID-19-induced depression, Dubai rebounded and demonstrated robust growth in 2022, with property prices soaring by 9.94% and rental prices surging by 23.69% in July.

Attractive Cost of Housing

Dubai’s real estate market is distinguished by its affordability, making it an enticing prospect for investors. The potential for rental income, reaching up to 8% annually, adds to the appeal. The diverse investment options in Dubai encompass residential properties, hotels, apartments, and more. Additionally, property acquisition opens avenues for obtaining long-term visas in the UAE. Further details on this topic can be explored on the dedicated real estate investment page.

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Residential property sales totaled AED 22.7 billion as of June 2022, with 70.8% of 2021 sales realized by July 1, 2022. Government initiatives, including the Golden Visa program expansion and new residence permits, contributed to a steady uptick in property prices.

The year-over-year dynamics of Dubai’s residential real estate market, delineated on the DXB Interact website, showcase the average housing prices from 2014 to 2022 in dirhams per square foot.

FAM Properties Report 

The August 2022 report from FAM Properties reveals a remarkable 60.9% year-on-year surge in apartment sales, totaling 38,444. The average transaction value reached AED 1.2 million, exceeding the 2021 figure by 22.5%. Business Bay, Downtown Dubai, and Jumeirah Village Circle emerged as prominent areas for transactions.

In 2022, 13,195 villas were sold, with the average transaction value decreasing by 16.3% to AED 1.9 million. The graph of commercial property prices in Dubai, since 2014, displays a moderate decline with notable spikes in 2017 and 2021.

Research indicates a global trend where investors increasingly prefer homes in walkable, sustainably developed areas. Dubai’s real estate market aligns with this trend, emphasizing real estate investments to mitigate risks.

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Future Growth Predictions

With a projected 27% increase in ultra-high-net-worth individuals by 2025, the real estate market is poised for further expansion. Knight Frank anticipates the release of 100 thousand apartments and the completion of over 50 thousand houses by the end of 2022. The issuance of gold cards and the success of EXPO 2020 contribute to the sustained demand for real estate.

Dubai’s investment landscape is promising, offering a variety of options, affordable prices, and comparative attractiveness against European cities. Optimal conditions for investors are found across different regions, with new laws and amendments enhancing the country’s allure for foreign investments.

Business Bay stands out as one of the premier areas for renting office spaces in Dubai. Serving as the city’s business hub, it also boasts a significant residential presence. The average cost of renting store premises is 134 AED per square foot.
Al Quoz, an industrial area, concentrates on manufacturing companies, hosting numerous factories and auto shops. Warehouse space rental in this area typically costs around AED 34 per square foot, while office space rental is approximately AED 77.

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This comprehensive overview underscores Dubai’s resilience and attractiveness in the global real estate landscape, offering diverse opportunities for investors across residential and commercial sectors.

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