Why Dubai Is The Safest City To Invest In
On this week’s episode of Taking Care of Business with CEO, Carl Allsopp, and Operations Director, Paul Kelly, as they uncover Dubai’s record-breaking July property market!
From all-time highs in price per square foot to phenomenal sales volumes and surges in the rental market. They answer big questions like: Why is everyone investing in Dubai? Does Dubai’s market offer better value than other global hotspots? And, is an oversupply on the horizon?
All-time high property prices!
July was a historic month for Dubai’s property market, with the average price per square foot hitting an all-time high of 1,397 AED. This represents a 17% increase year-on-year and a 13% increase over the previous peak, setting a new benchmark for Dubai real estate.
The hosts discussed why these prices continue to rise, citing high demand driven by local and international buyers, an influx of new developments, and Dubai’s global appeal. Despite the steady price growth, Dubai still offers a competitive edge when compared to global markets like the UK. Carl Allsopp noted that in cities like Manchester and Birmingham, property prices hover around £600-620 per square foot, making Dubai, at around £300 per square foot, a relative bargain.
Dubai’s unbeatable value
Despite reaching record-high prices, Dubai remains a great value compared to other major cities. As Carl pointed out, the cost per square foot in Dubai is still significantly lower than in the UK’s secondary cities. Even though some may perceive Dubai’s market as expensive given the all-time high prices, it’s still offering far more value when compared globally.
For those coming from cities like London or Manchester, Dubai’s prices are shockingly low in comparison. This incredible value is a major reason why investors from around the world continue to pour money into Dubai real estate, even as the market continues to surge.
Surges in sales transactions
In addition to record prices, Dubai saw a massive increase in sales volume in July, with a staggering 46% year-on-year increase in the number of properties sold. Despite July typically being a quieter month due to summer travel, this year saw an unexpected 10% increase in transactions compared to June.
This surge was driven by both off-plan and ready property sales, with off-plan properties making up 61% of total transactions. The spike in volume further demonstrates that demand remains incredibly strong, even during traditionally slower periods.
Strong rental market activity
The rental market in Dubai has also been booming, and Paul Kelly shared some eye-catching statistics in this regard. Rental transactions saw a 19% increase compared to June, which is unusual for the typically quieter summer months. There was also a 43% year-on-year increase in viewings, meaning more people are actively seeking rental properties despite the extreme summer heat.
While many new residents and families moving to Dubai tend to rent before buying, landlords have started to adjust their approach to keep up with the demand. Interestingly, Paul noted a shift in payment terms, with a 25% increase in tenants opting to pay their rent in four or more cheques, indicating that landlords are becoming more flexible in response to rising rental prices.
Are we close to an oversupply?
With so many new developments being launched in the first half of the year and more expected in the coming months, Carl and Paul addressed the potential issue of oversupply in the future. By 2026 or 2027, hundreds of thousands of new units could flood the market, potentially leading to an oversupply. However, Dubai’s population growth and the increasing number of international investors are expected to balance out much of this new supply.
They emphasised that, while oversupply is something to watch, Dubai’s market fundamentals remain strong. Population growth, consistent international demand, and the city’s appeal as a safe, luxury destination all point to continued growth in the short to medium term.
No signs of a slowdown just yet
Despite the dramatic growth in both property prices and transaction volume, there are no signs of a slowdown on the horizon. Even with rising interest rates globally, which typically cools property markets, Dubai’s real estate remains resilient. Carl and Paul pointed out that the fundamentals in Dubai’s market are stronger than ever, and there’s a greater proportion of people buying homes to live in, rather than purely as speculative investments.
While the market will eventually soften—because property markets are cyclical—there are no immediate indicators that this will happen soon. According to Carl, the only factors that could stop Dubai’s current momentum are a “black swan” event that no one sees coming, or Dubai taking intentional steps to cool down the market, as it did a decade ago by raising transfer fees and lowering loan-to-value ratios. But for now, Dubai’s property market remains strong, with no signs of slowing.
Wrapping up
July was a record-breaking month for Dubai’s property market, with both property prices and sales volumes reaching new highs. While the potential for oversupply exists, Dubai’s strong population growth, international demand, and high-value investment opportunities continue to drive the market forward.
To read our full July Snapshot Market report, click here.