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Throughout the first half of 2023, there was a staggering surge of nearly 23% in rental prices on an annual basis. Projections hint at an anticipated growth of approximately 30% by the year's end. Looking ahead to 2024, experts foresee the upward trajectory to persist.
The numbers reveal a great increase in long-term rental prices, almost 27% since the beginning of the year. Short-term rentals experienced a spike of up to 30% in October. Surprisingly, even with a milder summer compared to the scorching heat of the previous year, there wasn't the expected drop in rental demand.
The escalation in rental costs is directly correlated with the surge in apartment prices. Over the period from mid-2022 to mid-2023, apartment prices saw a notable rise of 15%. Moreover, it's not solely about higher prices; there's also a notable surge in the number of transactions. In 2022, Dubai witnessed over 30,000 properties changing hands, with an expected increase to 50,000 in 2023. Investors are capitalising on this by purchasing apartments and subsequently renting them out to generate passive income.
Forecasts for 2024 anticipate a 20% increase in short-term rentals (up to 6 months) compared to 2023, and a 15% rise for long-term rentals (over 6 months). This trajectory is projected to be sustained, leading to organic growth in the real estate market. This growth will manifest in rising property values, an increase in the number of high-rise buildings becoming operational, and a surge in property transactions.
The demand for rentals continues to remain consistently high, encompassing both short and long-term stays. However, the majority of clients securing apartments plan to make these residences their homes for more extended periods, often exceeding 6 months and sometimes up to a full year.
The influx of professionals from across the globe moving to Dubai for career opportunities, competitive salaries, an elevated quality of life, and the warm climate remains a driving force behind the surge in rental prices.
As of July 2023, the city's population, according to the Dubai Statistical Centre, stands at 3,604,030 people, up from 3,515,264 in July 2022. Projections outlined in Dubai's Development Master Plan until 2040 indicate an anticipated growth of the city's population to 5.8 million.
The city's population continues to swell due to the inflow of new professionals, naturally resulting in increased demand for residential properties and subsequently driving up rental prices. Considering all these factors, there is no indication of the rising rental trend slowing down in 2024.
As 2024 unfolds, Dubai's real estate landscape appears ready for continued growth and demand in the rental market. The convergence of factors such as population expansion, robust job opportunities, and an increasing number of international professionals moving to the city suggests a sustained trajectory of rising rental prices and heightened demand for residential properties. The foreseeable future seems to hold a continuation of the trends witnessed, reinforcing Dubai's position as a thriving real estate hub amidst global dynamics.
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