Deloitte’s 10th annual Real Estate Predictions report offers a comprehensive overview of Dubai’s real estate market performance in 2023 and forecasts changes in various sectors for 2024. Dubai’s real estate market has shown remarkable resilience, driven by its safe haven status, economic growth, and demographic expansion.
Hospitality Sector
The hospitality market has made a strong recovery in 2023, with key performance indicators surpassing pre-pandemic levels. Occupancy rates averaged 77%, and average daily rates (ADR) increased by 0.2% Y-o-Y to AED 692 as compared to FY 2022. This trend is expected to continue in 2024, driven by Dubai’s popularity as a tourist destination.
Residential Sector
The residential market has sustained its upward trajectory, with unprecedented transaction levels in 2023. Sales prices and rents have increased by 18% and 26% Y-o-Y, respectively. Villa price growth has outpaced apartment prices, while rent growth has moved in tandem with pre-pandemic levels. This trend is expected to continue in 2024, albeit at a stabilizing pace.
Retail Sector
Malls continue to dominate the retail landscape in Dubai, despite the global surge in online shopping. The outlook for Dubai’s retail sector remains optimistic, with retail sales projected to grow by 6% between 2025 and 2027.
Office Sector
Office rents have exceeded pre-pandemic levels, registering a 15% increase YTD in September 2023. Economic growth forecasts and initiatives for ease of doing business are expected to underpin office market performance in 2024.
Industrial Sector
Warehouse rents in Dubai have risen year-on-year, driven by strong demand from various industries. Opportunities for growth are expected to continue in 2024, buoyed by economic forecasts and the expansion of the Transport and Storage sector.
Conclusion
Dubai’s real estate market is poised for continued growth in 2024, driven by its safe haven status, economic growth, and demographic expansion. The hospitality, residential, office, retail, and industrial sectors are expected to perform robustly, offering opportunities for investors and stakeholders.
