More forecasts for Dubai property price increases this year: Real estate prices could rise 8-12% y-o-y in Dubai in 2024, decelerating from the 20% rate recorded last year, real estate services firm Cushman & Wakefield said in its latest report (pdf).

Refresher: Data out over the past few weeks pointed to a record increase in real estate prices here in 2023, with indications that property prices will continue to appreciate in 2024 — albeit at a slightly slower pace than last year. The IMF estimates that real estate prices in the UAE faster than anywhere else in the world, with a 10.4% y-o-y surge in 2023. Others estimate that prices in Dubai advanced 15-18%.

The biggest jumps were in Palm Jumeirah, which saw prices rise 34% last year, while “other central villa districts including Jumeirah Park (31%) and The Lakes (28%) also witnessed sharp rises,” Cushman found.

ICYMI- We ran a deep-dive into the reasons behind the property price boom in 2023, and abreakdown of different analysts’ and pundits’ outlook for the market this year.

Cushman sees a handful of factors contributing to slower growth in new build prices, including limited availability of post-handover payment plans in the off-plan market — but that will also keep a floor under the secondary market.

Affordability concerns persist: The rising contribution of off-plan sales to the total market mix signals an increase of investors buying into the market, as opposed to folks buying primary dwellings in which to live, the report cautioned. There are also risks of inflationary pressures driving end users away, with a risk of more migration to the northern emirates, the report said.

Still, it’s higher than what others expect: S&P Global Ratings forecasts a 5-7% jump in Dubai property prices this year, with risk of a cyclical slowdown. Morgan Stanley also sees “continued tailwinds” for the market and thinks the market this year will be “less of a boom than 2023.” Some analysts have seen signs of a cooldown since the last few months of 2023, with buyers downsizing amid economic uncertainty and oversupply giving way to lower prices.

Rentals are also forecasted to surge 10-20% in central locations, according to the report. Outer and sub-urban locations are expected to experience less inflated rental increases. Despite rents continuing to increase, the rate of increase is cooling in some popular neighborhoods, with average rents rising 19.2% in November, slightly slower than October’s 19.7%, according to data from property advisory firm CBRE.

Some 65k residential units are slated for handover this year, though the report expects only 32k units to be handed over. This is down from 39.4k units handed over last year, the biggest volume of handovers since 2020.

The biggest players in the market last year: Emaar Properties accounted for 26% of the handovers, while Aizzi overtook Damac with a 15% share, and Damac had an 8% share, the report said.

Apartments were king, but both apartments and villas saw prices rise: Apartment unitsaccounted for over 83% of property sales, while villa units comprised 17% of sales, the report said. Villa sales prices rose 22% year-on-year, up over 16% from their 2014 peak, while apartment prices rose 20% y-o-y, just 6% below their 2014 peak, the report noted.

Offices aren’t spared: Rentals for office spaces are expected to climb 10-15% y-o-y in 2024 as new market entrants continue to pour into the emirate, while established entities expand operations, the report said, adding that 1.65 mn square feet worth of office space is expected to be handed over. Prices rose 21% y-o-y in 2023, with the sharpest increases witnessed in Downtown Dubai (45%) and Business Bay (36%), while sales prices rose 23% y-o-y.