In the first half of 2023, rental prices surged by nearly 23% annually. By year's end, projections hint at an anticipated growth of approximately 30%. Looking ahead to 2024, this upward trajectory is expected to persist, as affirmed by a leading expert in Dubai's real estate management sector.
"We have analyzed the numbers, and since the start of this year, long-term rental prices have increased by 27%. There was a spike of up to 30% for short-term rentals in October when the low season ended and the high season began. Interestingly, this summer, despite being milder than last year's scorching heat, didn't see the usual drop in rental demand.
For 2024, we're forecasting a 20% jump in short-term rentals (up to 6 months) compared to 2023, and a 15% rise for long-term ones (over 6 months). We predict an organic growth in the real estate market, reflected in rising property values, the number of high-rise buildings being put into operation, and a surge in property transactions.
The increase in rental costs is directly tied to apartment price hikes. For example, from mid-2022 to mid-2023, apartment prices rose by 15%. And it's not just about higher prices; the number of transactions is also on the rise. In 2022, Dubai saw over 30,000 properties changing hands, with an anticipated 50,000 in 2023. Investors buy apartments and then rent them out to generate passive income.
The demand for rentals remains consistently high, both for short and long-term stays. However, the majority of clients who secure apartments through our service, are planning to call them home for more than 6 months and even a full year," says Ilnara Muzafyarova, the Head of Colife.
An increasing number of professionals from all over the world continue to move to Dubai for work, inevitably influencing the rise in rental prices. These experts are drawn by career opportunities, competitive salaries, quality of life, and the warm climate.
According to the Dubai Statistical Center, as of July 2023, the city's population stands at 3,604,030 people, up from 3,515,264 in July 2022. As per Dubai's Development Master Plan until 2040, the city's population is projected to grow to 5.8 million.
The city's population keeps growing, thanks to the influx of new professionals. This naturally results in increased demand for residential properties and subsequently drives up rental prices. Given all these factors, there's no indication of the rising rental trend slowing down in 2024.
