In an unprecedented event, the ValuStrat residential property price index in Dubai has reached a new all-time high of 190.1 in September. This indicator, which is set against a benchmark of 100 in January 2021, reveals that property values in Dubai have almost doubled since then. This sustained growth reflects the strength and attractiveness of the real estate market in the emirate.
The monthly growth rate, however, has shown a slight slowdown compared to previous periods, suggesting a possible stabilization in the market. Despite this, the upward trend continues, driven by consistent demand and the solid economic fundamentals of Dubai. Investors and analysts are watching this phenomenon with interest, considering its long-term implications.
The astonishing rise of the residential property price index reaffirms Dubai’s position as a preferred investment destination. This historical milestone is not only significant for the local market but also has repercussions on global real estate dynamics. The confidence of international investors and population growth are key factors in this achievement.
EMAAR PROPERTIES AND ITS GROWTH IN THE REAL ESTATE MARKET
According to estimates by CI Capital, the net profit for the third quarter of Emaar Development is expected to be 1.5 billion dirhams (409 million dollars). This represents a 24% increase compared to the second quarter, although it shows a 20% year-on-year decline. This annual decrease is attributed to specific factors that have affected the revenue of its parent company.
CI Capital has issued “overweight” recommendations for both Emaar Properties and Emaar Development, setting target prices at 12.20 AED and 11.50 AED respectively. These projections reflect confidence in the future performance of both entities in Dubai’s competitive real estate market. Investors take note of these recommendations when considering their financial decisions.
Shares of Emaar Properties closed on Wednesday at 8.40 AED, while those of Emaar Development closed at 8.77 AED, indicating a positive valuation in the stock market. These values reinforce the perception of stability and growth for the companies, serving as key indicators for potential investors and stakeholders in the sector.
Diversification and strategy: the keys to Emaar Properties’ success Experts in the sector point out that Emaar Properties offers greater income diversification thanks to its hospitality and retail units, making it a preferred choice for investors. This breadth in its portfolio allows the company to cushion possible fluctuations in the residential real estate market. The diversification strategy is seen as a fundamental pillar for its long-term sustainability.
Dividend payments by Emaar Development have promising prospects from 2026, as projects under development reach key construction milestones. These advancements will release funds from the projects’ escrow accounts, potentially increasing profitability for shareholders. Analysts suggest that dividend yields will be attractive, reinforcing interest in the company.
The future vision of Emaar Development focuses on consolidating its market position and maximizing return on investment, leveraging emerging opportunities in the sector. The company continues to focus on innovative and high-quality projects, aligning with the expectations of a demanding and competitive market.
Trends in the residential market in Dubai
The ValuStrat residential property price index in Dubai recorded a 29% increase in the 12 months to September, putting the average value of a home at AED 2.92 million ($796,000). Additionally, the price per square foot has reached its highest level since at least 2010, indicating growing demand and appreciation of properties.
In September, three-quarters of home sales in Dubai corresponded to off-plan properties, experiencing a 254% increase in volume compared to the same month last year. On the other hand, sales of completed homes rose by 19% year-on-year, reflecting dynamism in both the primary and secondary markets.
Emaar dominated the market, accounting for 18.8% of home sales in September, closely followed by Damac with 14.7%, according to ValuStrat estimates. This leadership evidences Emaar’s strong presence in the sector and its ability to attract buyers and investors in a highly competitive market.
FUTURE OUTLOOK AND THE IMPACT OF INTEREST RATES
Experts predict that the demand for residential properties in Dubai will remain healthy until at least 2025, driven by population growth and a favorable environment for investors. Attractive rental yields and the strong economic fundamentals of the emirate contribute to maintaining interest in the real estate market. These positive trends are expected to continue in the short and medium term.
From 2026, an increase in the supply of completed properties is anticipated, which could create an imbalance between supply and demand until at least 2027. However, even in the face of a potential surplus, demand is expected to remain strong. Analysts are confident that the strength of the market and proactive policies will mitigate the risks associated with oversupply.
The effect of interest rate cuts is another factor to consider. Although most property purchases in Dubai over the past year were made in cash, a reduction in rates could further incentivize sales. The availability of more accessible financing could boost the secondary market and, in turn, positively influence the primary market.
