REM TIMES speaks to industry experts on the forecast of apartment prices witnessing a moderation this year with luxury properties continuing to spike
The speedy momentum gathered by Dubai’s real estate sector in the last several years is expected to slow down a bit in 2024. After a fantastic 2023, the apartment prices have supposedly hit a peak this year and are set to witness a moderation in prices. However, the luxury property segment is still showing no signs of stopping and is poised to witness several spikes in the coming months. REM TIMES speaks to industry experts on these predictions and asks them for tips on property investment in the changing market.
According to Salvador Silva, Property Consultant, Aqua Properties, the high-end sector’s growth will outpace the broader market, regardless of whether the latter stabilises, or continues to grow at a steady rate, as witnessed during the course of last year. “The key driver for price increases in 2023 was construction not being able to keep up with the influx of new capital from investors and end-users. This effect is magnified in the ultra-luxury segment, where supply is much more limited, and demand is more inelastic to changes in price,” he reasons.
The key driver for price increases in 2023 was construction not being able to keep up with the influx of new capital from investors and end-users. This effect is magnified in the ultra-luxury segment, where supply is much more limited, and demand is more inelastic to changes in price.
Salvador Silva, Property Consultant, Aqua Properties
Ensuring transparency for clients considering investments in both apartment and luxury property sectors in Dubai is of utmost importance during this time, believe brokers. “We provide comprehensive market analysis, including pricing trends and rental yields. Additionally, we offer detailed property inspections and access to the top developers. By emphasising transparency and integrity, we aim to build trust and confidence with our clients, ensuring they make well-informed investment decisions that align with their needs and preferences,” notes Sunny Tyagi of Scorpion Properties.
Managing Director of Luxury Property Mark Richards believes that this is fairly straightforward for secondary properties. “If someone is considering a three-bed villa in Maple, Dubai Hills, as an example, we would look at the market data for Maple as well as comparable options in areas like Emirates Living. For an off-plan investment, it’s harder to present an accurate forecast. We can look at the developer’s track record and the performance of similar projects in the past, but there is naturally a higher level of risk associated with a property that hasn't been handed over yet,” he advises.
With each part of the emirate offering a number of investment options for mid to high budgets, the first advice of experts for investors would be to zero in on the area and understand their investment goals. “I always suggest that investors look at areas that are relatively underdeveloped and have room for growth. An area like Downtown, for example, is almost fully developed. It will perform in line with the market, but won’t see any exceptional growth. By comparison an area like Arjan, while not as high-profile, is continuing to improve each year with new developments and infrastructure,” observes Mark Richards. “Also understand your investment goals – what is it that you are trying to achieve? Are you purchasing with the intent of earning high yields/ROI? Are you looking for capital appreciation on your property? Is it a matter of flipping for a quick profit? When an investor has clarity on their investment goal, a strategy and a portfolio can be created to help them achieve that,” he adds.
According to Sunny Tyagi, conducting thorough research and due diligence and diversification of investments are some important steps towards ensuring that one’s investments yield good returns. “It's crucial to understand market trends, demand-supply dynamics, and regulatory changes. Diversification is the key; consider spreading investments across different property types and locations to mitigate risks. Seeking guidance from experienced professionals who have a deep understanding of the Dubai market is also important to make informed decisions, considering they have in-depth knowledge about the current scenarios of Dubai’s real estate,” he concludes.
