‘Expensive Dubai’ Concerns Raised by DAMAC Property Chairman

Dubai's property market shows no signs of slowing down, as 2024 is shaping up to be another record-breaking year. According to local real estate firms, both sales figures and property values continue to soar. The city's ever-growing demand for luxury properties is driving up not only home prices but also the overall cost of living. This comes as the United Arab Emirates is set to be the world’s top wealth magnet for the third year in a row.

For Hussain Sajwani, chairman of Dubai property giant Damac, this trend brings both benefits and challenges.

"What concerns me a little bit is that Dubai is becoming an expensive city," Sajwani said during an interview with CNBC’s Dan Murphy. He pointed out that the surge in demand, fueled by talented professionals flocking to the city, is pushing prices higher across the board.

"Today, even getting a seat in a school is difficult... businesses are going to raise prices, and inflation is going to be high. Dubai is becoming an expensive city," he added, noting the difficulty of managing this growth amid a continuous influx of residents.

Record-Breaking Numbers in 2024

The numbers tell the story. In July 2024 alone, Dubai property sales hit AED 49.6 billion ($13.5 billion), marking a 31.63% increase compared to July 2023, according to brokerage firm Elite Merit Real Estate. A report from the same firm highlighted that the first half of 2024 saw over 43,000 transactions valued at approximately AED 122.9 billion, a 30% jump from the previous year.

Much of this growth is driven by the rapid absorption of new inventory. Elite Merit estimates that around 80% of units launched since 2022 have already been sold, reflecting the insatiable demand for real estate in the city.

Global Appeal

Sajwani believes Dubai's property boom is far from over. “The Dubai property market is doing extremely well, and I think we’re going to continue to do well,” he said. “Everybody wants to go to Dubai, from the taxi driver to the waiter to the businessman.” The city is attracting not only wealthy individuals but also talented professionals from all over the world.

He also credited Dubai’s handling of the Covid-19 pandemic for its growing global appeal. While much of the world was in lockdown, Dubai remained open, encouraging tourism and offering visas to remote workers and entrepreneurs.

A More Stable Market

Reflecting on the city’s notorious 2008-2009 property crash, Sajwani reassured that Dubai is much more stable now, thanks to government regulations introduced after the crash. “The regulations are very good, very strict on developers, customers, and zoning,” he said. “There is strict escrow, so the customer’s money is protected, and that’s what makes the market efficient.”

In Sajwani’s view, Dubai is well-positioned to continue its upward trajectory. With rising demand, new regulations, and a booming market, the city is not just a luxury hotspot but a thriving global hub.