Real estate in Dubai cools down amidst mixed trends in global market
Dubai’s impressive 124% rise stalls, while Manila tops global price gains; broader market growth slows
Dubai: After a period of rapid growth, Dubai's real estate market is starting to stabilize. Prices, which increased by a substantial 124% since early 2020, have slowed down considerably. In the first quarter of 2024, prices rose by 15.9%, but in the second quarter, they fell by 0.3%. This slowdown is expected after several years of rapid price increases.
Manila takes the lead as global markets slow
Globally, Manila is stealing the spotlight with a stunning 26% surge in prime residential prices, according to Knight Frank’s Prime Global Cities Index. This index, which monitors price movements across 44 major cities, reveals a broader slowdown in growth.
Annual price increases have eased from 4.1% in Q1 to 2.6% in Q2, dipping below the long-term average of 5.3%. This global deceleration highlights a critical need for economic stimulus, like rate cuts, to spark renewed growth.
Image credit: DubaiWorldTradeCentre
Central banks under the spotlight
Liam Baily, a real estate expert, believes that Dubai's real estate market needs more economic support - as quoted by Khaleej Times. He says that if the central bank doesn't lower interest rates soon, the recent price increases may start to slow down. The future of the market depends on what the central bank does in the next year.
Miami’s resurgence vs. Dubai’s pause
While Dubai's real estate market is slowing down, Miami's is doing very well. Prices in Miami have increased by 8% in the past year. This shows that different cities are experiencing different economic conditions.
Indian cities - a mixed bag of growth
In India, the real estate scene shows varied growth patterns. Mumbai and New Delhi have enjoyed notable annual price hikes of 13% and 10.6% respectively, while Bengaluru has seen a more modest rise of 3.7%. Shishir Baijal, Chairman and Managing Director at Knight Frank India, attributes this to rising demand in the premium segment. "The affluent are driving this growth, and with a positive economic outlook, we anticipate this trend to continue into 2024," Baijal is quoted.
Europe’s shifting landscape
In Europe, Stockholm is leading with the most significant improvement in annual growth for Q2 2024. Meanwhile, cities like Madrid, Dubai, and several New Zealand locations (Christchurch, Wellington, and Auckland) are experiencing a slowdown. This pattern reflects a broader trend of moderation across various real estate markets.
What’s next?
As the global real estate market adjusts, all eyes will be on central banks and their monetary policies. The evolving landscape will be shaped by economic shifts and investor sentiment, making the coming months crucial for future market trends.