Growing population and buoyant economy have fuelled four-year bull run, but some warn rising prices are unsustainable
Dubai’s property market is racing towards a record bull run, with the Middle Eastern commercial hub’s buoyant economy and swelling population fuelling the longest price rally since the eve of the 2008 financial crash.
Properties in Dubai sold for an average of Dh1,750 ($476.50) per square foot last month, according to data provider Reidin, a surge of 75 per cent from February 2021.
Some question how long the meteoric price rises can continue in a city that has experienced two boom-bust cycles since its property market opened up in 2003.
The 50-month rally is hurtling towards the 57-month record that ended with the global financial crisis, according to Reidin. Dubai at the time suffered a real estate crash that exposed unsustainable debts at some state-owned companies and required a bailout from Dubai’s oil-rich neighbour Abu Dhabi. The soaring property values are underpinned by Dubai’s robust economy, with the city capitalising on its decision to open up to visitors during the pandemic while other hubs still restricted travel.
The UAE also liberalised its visa system in 2022, encouraging more expats to see the city as home for a longer period. Newcomers have included everyone from millionaires trying to avoid tax rises to white-collar workers hoping to cash in on the oil-rich Gulf’s growing markets, and Ukrainians and Russians fleeing the impact of Moscow’s invasion of Ukraine.
That influx has caused Dubai’s population to swell nearly half a million since the beginning of 2020, according to Dubai Statistics Centre estimates, hitting 3.8mn this year. That means Dubai’s villas and flats — popular with speculators in the past — are now in demand from people wanting to settle.
“They’re building a lot of apartments and not building enough houses,” said Barnaby Compton, a Dubai real estate agent. “We have an ageing population and we have more families moving in with kids.”
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