Comparative Analysis of the Dubai Real Estate Market: Demand and Price Changes for Real Estate

Comparative Analysis of the Dubai Real Estate Market: Demand and Price Changes for Real Estate

11.07.2023 (updated 11.07.2023)

  • AX Blog
  • Comparative analysis of the Dubai real estate market | AX CAPITAL

Buying real estate, and commencing transactions related to it, is one of the most popular and reliable ways of investing. However, before deciding to invest in residential real estate, it is important to analyze the market and assess its potential. In this article, we will compare the real estate market in Dubai relative to other cities and countries and analyze the demand for housing and price changes.


The Price per Square Meter of Housing in Different Countries

Before we start analyzing the real estate market in Dubai, let's compare the prices per square meter of housing in different countries.

CityAverage price per sq. ft. in $
Hong Kong2322
Tel Aviv1300

Compared to other popular and economically developed cities, the Dubai real estate has a relatively small price per square meter.

Rising Real Estate Prices

For a deeper understanding of the real estate market in Dubai, it is important to analyze the change in housing prices in different countries. According to a study by International Wealth, real estate prices in Dubai have increased by 9% in the last two years. This indicates the steady growth and attractiveness of the Dubai market. At the same time, in Spain, Morocco, Egypt, and Italy, housing prices have fallen by 2-10%, which may indicate problems in these markets. And for 2022 in Turkey, prices have risen by 60%, indicating high inflation in the country.

“Real Estate in Dubai Is a Bubble That Will Burst Soon”

There is a common opinion among investors that the Dubai real estate market is a bubble, and that housing prices are rising too fast and do not correspond to the real values. Some believe that the result of this will be the loss of not only profits but also invested funds. However, this is not true, as can be seen by looking at the following study by the Swiss investment bank UBS.

Dubai Real Estate Bubble
A world map, showing the chance of a bubble in the real estate market in different cities around the world. Source: UBS

According to the study, the Dubai real estate market is far from a crisis. Experts explain the popularity of the opinion about the imminent collapse by unjustified expectations of investors who were promised a payback of up to 60% per year. Forecasts of such quick paybacks were issued by unscrupulous realtors and influencers who wanted to conclude as many transactions as possible. The real yield from renting out housing is about 6% per year.

Demand for Housing in Dubai

One of the key components of successful real estate investment is the demand for housing. In the case of Dubai, the demand for housing is still high. This is due to several factors, including a high standard of living, developed infrastructure, and a favorable business climate. In addition, Dubai attracts the attention of both tourists and businessmen, which creates additional demand for renting and purchase of housing. 

In 2022, almost 100 thousand agreements for the sale and purchase of housing were concluded in Dubai, and in the first quarter of 2023, more than 8 thousand transactions were resolved. Part of all contracts fell on investors, but the number of residents who are looking for new housing has also increased in the city. As a rule, apartments in new buildings with 1 or 2 bedrooms are in the greatest demand. Compared to 2022, the demand for housing in new buildings also increased by 70%.

Jumeirah Village Triangle – real estate in Dubai for investment
Jumeirah Village Triangle is an area with one of the highest ROI. Source:

Dubai Real Estate Market Forecast

Experts predict that the real estate market in Dubai will continue to develop in the coming years. Real estate prices will continue to grow by 7-12% per year, which will ensure further interest in the market from foreign investors. This is due to economic growth, an increase in the number of business projects in the city, and population growth. Thus, investing in the Dubai real estate is a promising solution.

Graph of the growth of real estate prices in Dubai over 10 years
Graph of changes in real estate prices in Dubai over the past 10 years.

Reasons to Invest in the Dubai Real Estate Market

Finally, let's look at the reasons why investing in the Dubai real estate market can be a profitable solution:

  • Dubai offers high rental yields. The average annual return is 6%. 
  • The Emirates have a favorable tax system that completely exempts from tax for the purchase of real estate, which makes investments even more attractive. 
  • The city is an international business center. Foreign investors, tourists, and professionals come here, which ensures a stable demand for housing. 
  • For the purchase of real estate from 2,000,000 AED, all foreigners also have the right to obtain a golden visa, and subsequently citizenship. We wrote more about this in the article.

A comparative analysis of the real estate market in Dubai shows that investing in real estate can be a profitable solution. High demand for housing, stable price growth, and a favorable investment environment make Dubai an attractive market for investors. However, before investing in Dubai real estate, it is important to conduct your research and consult with real estate professionals. Investments are always fraught with risks, and only a thorough analysis can help you make the right decision.

If you are interested in investing in the Dubai real estate market, contact AX CAPITAL specialists for more information and advice. We will help you choose the most suitable properties and will do everything possible to make your investment a success. Do not miss the opportunity to invest your money in the attractive and promising real estate market of Dubai.

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