Dubai house prices are set to mostly rise steadily over the next two years, driven by demand from foreign investors, according to a new Reuters poll of 13 property market analysts.
Analysts cautioned that higher interest rates and a lack of affordable homes could curb the activity.
Dubai property market is holding on to upbeat momentum following a long streak of falls last year amid an economic rebound propelled by higher energy prices and a revival in trade and tourism.
The analysis pointed to a median rise of 7.5 percent in Dubai house prices in 2022, unchanged from the previous poll taken two months ago.
Market sentiment, lifted by the pandemic easing, “coupled with the successful hosting of the World Expo, the reopening of travel corridors, continues to underpin the market’s rebound,” said Faisal Durrani, head of Middle East research at Knight Frank.
Data from the Dubai Land Department showed the emirate’s real estate sector had its best quarter in more than a decade, with Q1 sales transactions at their highest since 2010.
However, price rises were expected to slow to 4.5 and 3 percent in 2023 and 2024 respectively, bringing stability to the market.
Moreover, the majority of respondents noted that demand from foreign investors will drive Dubai’s housing market this year.
According to the study, these expected price increases, even though modest, will pose challenges for first-time buyers as interest rates were expected to climb higher, hurting affordability.
