Dubai set to add 34,000 real estate units in 2024

Riding on the wave of intense interest and the solid performance seen in the previous year, the UAE’s real estate market, particularly in Dubai and Abu Dhabi, is expected to rise further in 2024. This positive forecast was shared by industry experts during a panel discussion at the event hosted by JLL, titled “Navigating the Growth Spectrum: Exploring Strategies for Sustainable Success.”

The panel stated that the UAE’s real estate market benefits from strong economic structure, proactive government policies, and an increase in investor confidence, all of which are expected to fuel growth across various property segments in the near to mid-term.

James Allan, JLL’s CEO for the Middle East and Africa region, pointed out the strength and endurance of the UAE’s real estate market, which has become a cornerstone of the nation’s diversification strategy. Allan predicts a good year ahead for the industry, even amidst potential inflationary challenges, citing the sector’s contribution to the UAE’s appeal to both regional and international investors as a stable investment destination amid global uncertainties.

The discussion also showed that while the residential market is expected to see continued increases in transaction values and volumes, the growth rate might decelerate slightly in 2024. Nonetheless, demand for luxury properties, branded residences, and lifestyle-focused real estate projects remains strong. There is also an increase in co-living spaces that cater to the needs of young professionals by offering affordable, convenient, and inclusive housing options.

Despite rising costs associated with land and construction, experts forecast that the UAE, with Dubai and Abu Dhabi leading, is set to introduce approximately 34,000 and 8,000 new units, respectively, in 2024. This projection aligns with a report from Property Monitor, which anticipates the completion of over 40,000 units in Dubai following a launch of nearly 100,000 units in 2023. The report also showed 16.4 percent increase in housing prices last year – the highest in over a decade.

The JLL panel also touched on the brighter outlook for the real estate sector across the GCC, strengthened by increased investment from private and sovereign wealth funds and higher infrastructure spending. The UAE and GCC markets are seen as resilient to the global economic pressures of inflation and interest rate hikes, with Dubai maintaining its lead in the regional property market.

The UAE’s reputation as a key financial and business centre continues to drive demand in major real estate segments, attracting attention from global investors. The country’s residential, hospitality, and office sectors are particularly strong, with commercial real estate offering a competitive environment due to the imbalance of high-quality space demand and supply. The panellists also noted the role of sustainability and technological innovations in transforming the real estate sector, stressing the rising relevance of green building practices and energy efficiency.

The discussion reiterated a spike in demand for luxury off-plan properties in Dubai, with affordable housing under AED 3 million emerging as a highly sought-after segment among developers. The office space market in both Dubai and Abu Dhabi remains landlord-favoured, with rent increases driven by the scarcity of premium spaces and growing occupier inquiries. The move towards remote work has also sparked a heightened demand for flexible office spaces.

The UAE’s industrial sector, especially logistics and warehousing, is witnessing substantial growth, supported by government initiatives aimed at bolstering the manufacturing and logistics industries. This growth is further fueled by the expansion of e-commerce and third-party logistics (3PL) services, cementing the UAE’s position as a leader in the GCC logistics market and its global ranking on the Logistics Performance Index.

Original article reference: Khaleej Times.

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