Dubai’s real estate market is anticipated to witness a potential 12% increase in property values this year, raising concerns about the affordability for some expatriate residents in the city, Invest-Gate reports.

Despite completing 39,400 homes – the highest since 2020 – contributing to a decline in demand, home prices are projected to rise by 8% to 12% in 2024, following a 20% increase on average in 2023. Rental rates are also forecasted to jump between 10% and 12% this year, compared to 19% in 2023 and 27% in 2022.

Moreover, limited post-delivery repayment plans in the property market and the potential for interest rate reductions may support the secondary sales market, helping alleviate price hikes.

Furthermore, Dubai’s real estate sector experienced a record-breaking year in home sales in 2023, driven by an influx of wealthy investors and eased visa regulations. The market rebounded from a seven-year slump, prompting a surge in demand for developers. Pre-sale apartment transactions surged by 78%, while off-plan villa sales saw a 31% decline.

Notably, as rental prices reached unprecedented levels, overall yields reached their highest point in seven years. The report indicates a 7.3% yield on apartments and a 5.5% on family homes.