Dubai Prices and Rents Up 20% While Abu Dhabi Transactions Soar

Dubai buildings and Yachts

The UAE real estate sector is thriving, with Dubai and Abu Dhabi experiencing significant increases in both sales prices and rents, according to CBRE Middle East’s Residential Market Review for Q1 2024.

Dubai's Real Estate Surge

With average prices climbing over 22% year-on-year, Dubai’s villa market saw the most substantial price hikes. Overall, both apartments and villas in Dubai witnessed positive price gains.

Dubai’s average property prices rose by 20.7% throughout the first quarter of 2024. Apartments increased by 20.4%, while villa prices jumped by 22.1%. Despite average sales prices being just below the 2014 highs by 0.1%, many upscale neighbourhoods have surpassed their previous records.

As of March 2024, average apartment prices stood at AED 1,486 ($405) per sq.ft., and villa prices averaged AED 1,776 ($484) per sq.ft. Surprisingly, villa prices have surpassed their 2014 levels by 22.9%.

Rising Rents in Dubai

By March 2024, average residential rents grew by 21.2% year-on-year. Apartments saw a 22.1% rise in rents, while villa rents grew by 14.5%.

Dubai Land Department data shows 159,941 rental registrations by March 2024, marking a 5.8% increase from the previous year.

New Supply and Transaction Records

Dubai added 6,526 units in Q1 2024, with the majority located in Meydan One, Jumeirah Village Circle, and Al Furjan. Another 46,086 units are expected by year-end, though CBRE anticipates that only a portion will materialise.

March 2024 set a new record for residential transactions, showing a 13.2% year-on-year increase. Off-plan sales surged by 20.2%, and secondary market sales grew by 2.2%. Q1 2024 saw total transactions reach 35,310, the highest first-quarter total ever, with off-plan transactions up by 23.9% and secondary market transactions up by 15.2%.

However, the prime market segment saw a 2.1% decline in sales, with super-prime transactions dropping by 16.5% to 227. Despite these declines, average prime prices increased by 16% to AED 4,661 ($1,269) per sq.ft., and super-prime prices rose by 14.8% to AED 4,978 ($1,355) per sq.ft.

CBRE anticipates continued growth in Dubai’s residential sales market, although at a slower pace. Rental rates are expected to rise, but with moderate growth. 

Abu Dhabi's Steady Growth

Abu Dhabi also performed well in Q1 2024, with transaction volumes increasing by 22.6% year-on-year. Off-plan sales rose by 18.1%, and secondary market sales jumped by 34.5%.

Average apartment and villa prices in Abu Dhabi increased by 4.3% and 2.3%, respectively. The rental market saw 46,130 residential rental contracts, a 10.9% decline from the previous year, due to fewer renewals and new registrations.

Despite the drop in rental contracts, rents increased by 4.5% for apartments and 1.1% for villas. Only 80 units were delivered in Q1 2024, all in Al Raha Beach, with an additional 8,660 units expected by year-end, primarily in Yas Island, Al Sowwah, and Al Shamkha.

Expert Insights

Taimur Khan, Head of Research MENA in Dubai, noticed that high demand and reduced supply continue to drive performance in both cities. He expects ongoing price growth in Abu Dhabi and Dubai, albeit at a slower pace for rents in Dubai as the year progresses. Prime areas in Abu Dhabi are forecast to outperform in rental growth.

Overall, the UAE’s residential market began 2024 on a strong record, with elevated demand levels sustaining price and rental growth.

Original article reference: Arabian Business.


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