Real Estate

According to Asteco’s Q2 2024 real estate report, the UAE real estate market continues to demonstrate robust growth. Dubai’s strong economy, coupled with an attractive lifestyle, remains a significant draw for expatriates. The report highlights that Dubai's real estate market is driven by high equity, continued economic growth, infrastructure development, and a growing population. Abu Dhabi’s real estate market is also set for continued growth in 2024, bolstered by government initiatives and solid economic fundamentals. Meanwhile, the Northern Emirates are experiencing sustained development due to strategic planning, affordability, and increased investments.

Abu Dhabi Residential and Office Market

The Abu Dhabi market saw the delivery of approximately 2,400 residential units in areas such as Noya on Yas Island, Jubail Island, Masdar City, and Al Raha Beach. Several residential and mixed-use projects are currently in the planning stages, with public launches expected throughout 2024, broadening Abu Dhabi’s real estate landscape.

In the rental sector, upscale apartments and villas recorded strong activity. Average apartment rents saw quarterly and annual increases of 1% and 2%, respectively, while villa rents increased by 5% over the past 12 months. Prime residential areas, particularly waterfront communities like Al Raha Beach, Saadiyat, Yas, and Al Reem Islands, experienced strong demand and high occupancy rates, with some properties even having waiting lists.

The market also saw significant growth in private and corporate investments, driving demand for high-quality office spaces. Grade A offices in prime locations saw rental increases of around 10% compared to the previous year, with quarterly growth ranging between 3% and 8%, especially for new contracts.

In Q2 2024, Abu Dhabi recorded 2,135 sales transactions, with off-plan sales accounting for 57%. Apartments dominated both off-plan and ready sales, comprising 85% and 75% of their respective segments, experiencing a 6.8% quarterly increase. Ready property transactions showed healthy growth at 2.8% quarterly and 33.1% annually, although off-plan sales declined by 23.4% annually due to fewer project launches. Apartment sales prices continued their upward trend, with average quarterly and annual growth rates of 4% and 5%, respectively.

Dubai Residential and Office Market

The report indicates that in Q2 2024, the pace of new supply delivery in Dubai slowed compared to Q1 2024, with approximately 6,750 residential units completed. However, project launches continued robustly, covering a wide array of developments from low-rise buildings to expansive master-planned communities. Asteco anticipates the delivery of an additional 25,000 residential units in the second half of 2024, though some may be delayed until 2025.

Apartment and villa rental rates recorded quarterly increases of 3% and 2%, respectively, while annual rental growth moderated to single digits, with apartments seeing an 8% increase and villas 4%. This increase is primarily attributed to the revised RERA rental index, allowing landlords to implement larger rent increases upon lease renewal.

The office rental market continued to thrive, particularly for Grade A space, driven by robust demand and limited supply. The upward pressure on rents is expected to persist until new supply enters the market or business conditions change.

Dubai’s sales market remained strong, driven by ongoing project launches that boost off-plan transactions. Q2 2024 recorded a steady 2% growth in average sales prices, with areas such as Jumeirah Village and Business Bay experiencing above-average sales price growth. The off-plan property market maintained remarkable momentum, with both local and international investors eagerly acquiring newly launched units, attracted by strong returns on investment in a tax-friendly environment.

Some lenders started offering enhanced financing options for off-plan properties, allowing buyers to secure up to 10% more funding during construction. This move stimulates the off-plan market and broadens accessibility to potential buyers.

Al Ain and Northern Emirates Market

In Q2 2024, the Northern Emirates noted increased tenant migration from Dubai due to lower rental rates, improving development standards, enhanced infrastructure, and more flexible working arrangements. Typical apartments in the Northern Emirates saw greater rental growth compared to high-end properties.

The sales market maintained high activity over Q2 2024, with a steady flow of project launches. Al Ain’s residential rental market maintained positive momentum, with apartment rental rates remaining stable both quarterly and annually, and villa prices holding steady compared to the previous quarter, with a 2% year-on-year increase.

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