- Dubai saw the delivery of 6,250 residential units in Q1 2024, indicating robust activity in the real estate sector despite a slight decline from previous quarters
Asteco’s Q1 2024 Report reveals resilience in Dubai’s real estate market and promising growth in Abu Dhabi’s residential sales market
The report indicates that during the first quarter, the Abu Dhabi market saw the completion of 800 residential units
Press Release
Abu Dhabi – According to the Asteco Q1 2024 real estate report, Dubai’s real estate market remains resilient. Dubai’s strong economic performance and commitment to enhancing the quality of life and attracting skilled professionals will continue to attract a substantial number of expatriates. The report also highlights that the residential sales market in Abu Dhabi is showing promising signs of growth in the foreseeable future, with a gradual upward trajectory anticipated in the coming months.
Abu Dhabi Residential and Office Market
The report indicates that during the first quarter, the Abu Dhabi market saw the completion of 800 residential units across various Investment Zones with a significant portion concentrated in Al Raha Beach. The most noteworthy development was the launch of Yas Canal, a new mega villa project located within the same area. This project is expected to be completed by Q4 2027 and aims to deliver 1,146 units that are exclusively available to UAE nationals.
Throughout Q1 2024, the rental market for villas and apartments remained generally stable, with prime and high-end developments experiencing significant demand, leading to rental increases of 7% to 10% compared to the previous year, particularly for new contracts. The upward trend in rental rates for high-quality office space that began in 2023 continued into 2024. Some developments saw increases ranging from 5% to 7%, influenced by factors such as unit size and payment terms. The limited availability of premium office space in Abu Dhabi, coupled with growing demand from expanding businesses driven by government efforts to attract foreign investment, has contributed to the surge in rental rates.
The sales market of Abu Dhabi witnessed a significant increase in transactions during the first quarter of 2024. Approximately 2,660 deals were recorded for apartments and villas, marking a notable 17% rise compared to the same period last year.
Off-plan sales constituted a substantial portion of these transactions, accounting for about 1,840 deals, or approximately 69% of the total representing 2% growth from the previous quarter. Apartment sales comprised approximately 73% of the total off-plan and nearly 78% of completed property transactions during this period.
While average apartment sales prices across the market remained relatively unchanged, there was a notable surge observed within the upper and luxury segments located on Yas and Saadiyat Islands. Average villa sales prices experienced modest increases, ranging between 1% and 3% on a quarterly basis. However, year-on-year growth was more substantial, reaching 10% to 15%.
Dubai Residential and Office Market
During Q1 2024, the Dubai market witnessed the delivery of over 10,000 residential units comprising 7,300 apartments and 2,750 villas. This represents a significant increase compared to the previous quarter and sets a promising trajectory for the year ahead. An additional 30,000 units are also anticipated to enter the market by the end of 2024.
The rental rate growth has proven a mixed bag over the last 3 months. While average apartment and villa rental rates have more or less remained unchanged, rental rate growth has varied across different communities. Annually, growth rates have slowed to single digits, with villas at 6% and apartments following closely at 10%.
Dubai Land Department (DLD) data indicates a 4% decline in the number of new contracts issued in Q1 2024 compared to both the previous quarter and the corresponding period last year. On the other hand, the volume of renewals increased by 5% quarter-on-quarter and 12% year-on-year, with numerous tenants consenting to above-average rental hikes.
Similar to the leasing market, average sales prices for both apartments and villas remained relatively stable throughout Q1 2024, with some variations observed at the community level. Annual growth rates stood at 6% for apartments and 8% for villas, respectively.
The new year witnessed a gradual change in buyer preferences, with apartments in established communities such as Jumeirah Village Circle (JVC), Business Bay, Dubai Marina and Downtown Dubai gaining increased traction. Apartments typically yield higher Return on Investment (ROI), which is attributed to factors such as lower initial investment costs, greater rental demand, higher occupancy rates and shorter vacancy periods. The off-plan market remained prominent in terms of both value and volume of transactions.
Al Ain and Northern Emirates Market
The Northern Emirates performed particularly strongly over Q1 2024, indicating resilience and potential for sustained advancement.
Across the Northern Emirates, average apartment rental rates increased by 4% over the quarter and 9% annually, with high-end properties experiencing slightly more pronounced growth rates compared to typical units. Ras Al Khaimah emerged as the frontrunner in rental rate escalation, followed closely by Sharjah and Ajman.
In the Al Ain market, average rental rates remained relatively steady across all asset classes. This performance has been underpinned by sustained demand driven primarily by domestic factors.
While apartment rental rates proved broadly stable, adjustments have been observed, particularly in the highly price sensitive lower-end segment. At the other end of the market, high-quality villas realised significant annual rental growth, up to 8%, with the rate of increase contingent upon factors such as location and condition.
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About Asteco:
Asteco is a major regional and international award-winning full-service real estate services company that was formed in 1985 and has gained enormous respect for consistently delivering high quality, professional, value-added real estate services in a transparent manner. The company is widely recognised for its involvement with many of the projects that have defined the landscape and physical infrastructure of the United Arab Emirates.
The world-class company has a distinguished and important combination of local knowledge and international expertise and has been renowned for its application of the latest technological tools and innovations, its commitment to transparency, winning strategies, and human expertise.
Undisputed Real Estate experts with a regional presence to serve its customers, Asteco proudly represents a significant number of the region’s top property Owners, Developers, and Investors.
Asteco offers a wide range of services and solutions to its clients from Valuation Advisory and Building Consultancy, Property Management as well as Sales & Leasing services. The company applies innovative solutions and cutting-edge technology to add tangible value for its clients at every stage of the property lifecycle and to continuously elevate customer experiences.
