UAE’s housing market growth accelerating

Table of Contents

The UAE´s property market continues to grow strongly, supported by robust demand, healthy economic growth, and strong foreign interest.

“Looking at the performance, the residential sector continued to demonstrate strong growth in Q1 2024. In Dubai, both sale prices and rentals registered around 21% annual increases, respectively. In Abu Dhabi, sales prices increased by an average of 7%, while rental rates rose by an average of 4% during the same period,” said JLL MENA in its Q1 2024 UAE Real Estate Market Overview report.

Figures released by Reidin.com showed a similar pattern. Dubai´s all-residential property price index (RPPI) rose strongly by 20.71% y-o-y (16.81% inflation-adjusted) in Q1 2024, following annual increases of 20.14% in 2023, 9.53% in 2022 and 9.25% in 2021, and y-o-y declines of 7.12% in 2020, 6% in 2019 and 8.56% in 2018. In fact, it was its best showing since Q3 2024.

On a quarterly basis, Dubai residential property prices were up by 6.12% (5.57% inflation-adjusted) in Q1 2024.

By property type:

Apartment prices in Dubai surged by 20.43% (16.54% inflation-adjusted) during the year to Q1 2024, a sharp acceleration from the prior year´s 12.4% growth. Quarter-on-quarter, apartment prices were up by 6.2% (5.66% inflation-adjusted) in Q1 2024.
Villa prices increased sharply by 22.08% (18.14% inflation-adjusted) y-o-y in Q1 2024, following a 14.82% growth in the prior year. On a quarterly basis, prices rose by 5.35% (4.8% inflation-adjusted) in Q1 2024.

The average purchase price of apartments in Dubai was AED1,500,000 (US$408,386) by end-2023. On the other hand, the average purchase price of villas stood at AED3,200,000 (US$871,222) over the same period.

The United Arab Emirates house price annual change

Abu Dhabi´s house price growth is more subdued, with the all-residential property price index rising by 7.53% (4.05% inflation-adjusted) in Q1 2024 from a year earlier. During the latest quarter, prices were up by a modest 2.45% q-o-q (1.92% inflation-adjusted).

By property type:

Apartment prices in Abu Dhabi increased by 6.42% (2.98% inflation-adjusted) during the year to Q1 2024, an improvement from a miniscule growth of 1.22% in Q1 2023. In Q1 2024, apartment prices were up by 2.37% (1.84% inflation-adjusted) q-o-q.
Villa prices rose by 12.97% (9.32% inflation-adjusted) in Q1 2024 from a year earlier, after increasing by 1.19% a year ago. Quarter-on-quarter, prices were up modestly by 2.81% (2.28% inflation-adjusted) during the latest quarter.

Demand is surging. In Dubai, registered sales transactions reached a record 133,134 deals in 2023, up by an impressive 38% from the prior year, according to real estate portal, Property Finder. Likewise, in Abu Dhabi, the number of transactions also reached a record high of 13,298 units in 2023, up by a whopping 75% from the previous year, based on figures released by the Department of Municipalities and Transport.

The strong growth in demand continues this year. In Q1 2024, Dubai´s residential sales transactions registered a 16% growth in value and a 20% increase in volume as compared to the same period last year, according to JLL MENA. In Abu Dhabi, sales transactions fell slightly by 1% in value but still managed to surge by 17% in volume.

“Dubai remains one of the world´s most attractive investment destinations due to its stable economy, strong financial fundamentals, and ability to constantly find new opportunities for growth,” said Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of Dubai Executive Council.

“Moreover, global investors, institutions, and businesses continue to have high confidence in Dubai´s economy due to its growing profile as one of the best metropolises to live and work, its exceptional infrastructure, and supportive regulations,” he added.

The UAE economy grew by around 3.1% in 2023 from a year earlier, mainly driven by robust domestic consumption, according to the central bank. This followed strong expansion of 7.9% in 2022 and 4.4% in 2021 and a pandemic-induced contraction of 5% in 2020.

Healthy economic growth will continue this year, with the expected rise in oil production. The IMF projects that the UAE economy will grow by 4% while the UAE central bank is a bit more optimistic, expecting a real GDP growth rate of 4.2% this year.

UAE is one of the richest countries in the world, with a GDP per capita (PPP) of US$92,073 in 2023, based on IMF figures.

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Housing market cycle

From 2002 to 2008, Dubai´s property prices almost quadrupled, as Dubai became one of the world´s fastest-growing cities. After March 2006, a deluge of foreign money boosted Dubai´s ambitions following the passage of the long-awaited foreign property ownership law.

Billions of dollars were spent on mega-projects including Jumeirah Garden City (estimated cost: US$95 billion), Dubailand (US$64 billion), The Lagoons (US$25 billion), Palm Jumeirah (US$14 billion), and The World (US$14 billion).

Then the global credit crunch hit at the end of 2008.

Transaction volumes plummeted. Almost half of construction projects in the UAE, worth around AED1.1 trillion (US$300 billion), were either put on hold or canceled.

As the economy returned to growth, halted construction projects were resumed. From January 2012 to end-2014 Dubai experienced skyrocketing house prices, averaging 21.5% annually. However, house price growth in Dubai slowed by the end of 2014.

The housing market has been depressed since.

In 2015, Dubai´s all-residential property price index (RPPI) fell by 11% (-14.1% inflation-adjusted), according to DubaiLand.com.
In 2016, house prices fell by 0.4% (-2.9% inflation-adjusted) in Dubai.
In 2017, house prices fell by 3.9% (-5.2% inflation-adjusted) in Dubai.
In 2018, Dubai house prices dropped by 8.6% (-8.2% inflation-adjusted).
In 2019, Dubai house prices fell by 6% (-4.1% inflation-adjusted).
In 2020, Dubai house prices fell by 7.1% (-2.9% inflation-adjusted).

The enormous excess supply of apartments was pulling the market down. Other factors that contributed to the decline of the housing market during the said years included:

the Federal Mortgage Cap, introduced in 2013, slowed residential price rises in Abu Dhabi and Dubai.
the implementation of a 5% value-added tax (VAT) in January 2018, which applies to home sales after three years of the project´s completion. Sales within three years of completion have a 0% VAT rate.
the Dubai Land Department doubled property registration fees from 2% to 4% to dampen property demand.
the adverse impact of the Covid-19 pandemic on both the demand and supply side of the housing market.

The housing market started to recover in 2021, as activity slowly returned to its pre-pandemic levels. Dubai house prices rose by 9.25% while Abu Dhabi prices increased by 1.56%. The trend continued in 2022, with Dubai house prices rising by another 9.53% while they increased by just 1.46% in Abu Dhabi.

The housing market continued to gather pace last year, buoyed by robust demand. Dubai prices soared by 20.14% while Abu Dhabi prices increased by 4.96%.

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Dubai´s property transactions continue to rise strongly

Demand continues to increase strongly in Dubai. Registered sales transactions reached a record 133,134 deals in 2023, up by an impressive 38% from 96,459 deals in the prior year, according to real estate portal, Property Finder.

Last year, the total value of transactions in Dubai reached AED 571.3 billion (US$155.54 billion), encompassing deals for apartments, villas, commercial properties, and plots, including both cash and mortgage deals. This represents a substantial y-o-y growth of 45.8% from AED 391.8 billion (US$106.67 billion) registered in 2022.

During 2023:

Apartment sales transactions: AED 218 billion (US$59.35 billion), up by a huge 48.2% from a year ago.
Villa sales transactions: AED 65.7 billion (US$17.89 billion), up by 8.2% from the previous year.

According to Afimmo Properties LLC, the highest transaction volume last year was recorded in Dubai Marina, at AED 36.7 billion (US$10 billion) in total purchases. It was followed by Palm Jumeirah, with AED 28.51 billion (US$7.76 billion) deals; Jebel Ali Industrial First, with AED 27.93 billion (US$7.61 billion); and Wadi Al Safa 3, with AED 25.33 billion (US$6.89 billion).

The strong growth continues this year. In Q1 2024, Dubai´s residential sales transactions registered a 16% growth in value and a 20% increase in volume as compared to the same period last year, according to JLL MENA.

“The UAE housing market is quickly evolving and gaining maturity,” said Mortgage Finder in an earlier report. “Dubai, in particular, is growing exponentially and continues to appeal to new residents through its unparalleled lifestyle, business-friendly environment, global connectivity, and most recently, the new reforms in visa and residency laws.”

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Demand is also robust in Abu Dhabi

During 2023, the number of transactions in Abu Dhabi reached a record high of 13,298 units, up by a huge 75% from 7,957 units in 2022, according to the Department of Municipalities and Transport (DMT). Likewise, total transaction value also surged by 120% y-o-y to AED 44 billion (US$11.98 billion) last year, from AED 19.9 billion (US$5.42 billion) in the prior year.

Property demand remains robust this year. In Q1 2024, total real estate transactions in Abu Dhabi reached AED 15.9 billion (US$4.32 billion), comprising 5,127 sales and mortgage transactions. Of which, a total of 2,919 sales and purchase transactions were recorded in Q1 2024, amounting to over AED 9.6 billion (US$2.61 billion). Also, there were 2,208 mortgage deals, with a combined value of AED 6.3 billion (US$1.72 billion).

“Demand for off-plan developments, particularly high-quality ones, remained high, with significant interest from foreign investors, particularly from Russian and Chinese nationals,” said Asteco.

“Notably, Gardenia Bay, launched in September 2023, recorded a remarkable ~15% increase in asking prices between the initial and most recent phases, underscoring the strength of demand for premium off-plan residential units. This trend signals a strong appetite for high-quality real estate offerings in the region, particularly from reputable master developers,” Asteco added.

Better terms for ex-pats have been introduced

In 2019, a new system for long-term residence visas (Golden Visa) for foreign investors and professionals was put in place. It allows expats to live, work, and study in the country without needing a national sponsor. They can also enjoy 100% ownership of their business. These visas will be issued for 5 or 10 years and will be renewed automatically.

Eligibility for a 10-year visa:

Investors with public investments of at least AED 10 million (US$2.72 million)
Persons with specialized talents, such as doctors, scientists, specialists, inventors, as well as creative individuals in the field of culture and art
Outstanding students

Eligibility for a 5-year visa:

Investors in a property in the UAE with a gross value of not less than AED 5 million (US$1.36 million). The amount invested in real estate must not be on a loan basis and the property must be retained for at least 3 years.
Entrepreneurs with an existing project with a minimum capital of AED 500,000 (US$136,000)

In June 2021, a new 24×7 residency visa service was launched, allowing customers to connect with a service team and follow up on the status of their transactions at any time.

Then in 2022, the UAE government approved new conditions for getting a Golden Visa by investment, with reduced investment amount, no restrictions on the duration of stay in other countries, and an opportunity to buy off-plan properties. Said new rules came into force in October 2023.

Purchase real estate in the UAE for AED 2 million (US$545,000) to get a 10-year Golden Visa. Another option is buying real estate for AED 750,000 (US$204,000) to obtain a 2-year residence visa.
Purchase real estate for AED 2 million (US$545,000) to get a 5-year residence visa. Investors may also purchase a property for AED 750,000 (US$204,000) to get a 3-year residence permit.

Foreign homeownership rules are now very liberal

Foreign ownership laws are now very liberal in the UAE, particularly in Dubai and Abu Dhabi.

Foreign nationals are now allowed to buy freehold properties in designated areas in Dubai.
Gulf Cooperation Council (GCC) nationals are allowed freehold ownership anywhere in the Emirates.
Abu Dhabi allows foreigners to own property in designated investment zones on a freehold basis. This followed other market-boosting measures. In 2012, the government compelled public sector employees living outside Abu Dhabi to relocate within the emirate´s borders. Then in November 2013, the government canceled a 5% cap on annual rent increases.

Most residential property buyers in Dubai and Abu Dhabi are UAE nationals, followed by Indians, Saudis, British, and Pakistanis.

Housing supply continues to rise

In Dubai, there were about 39,000 new residential completions in 2023, following the completion of 41,000 units in 2022, 44,000 units in 2021 and 40,000 units in 2020, according to figures released by JLL MENA in its 2023 UAE Real Estate Market Report. This brought the total housing stock in Dubai to 719,000 units by end-2023.

Completions in recent years have been among the highest ever recorded, mainly due to Expo 2020.

In Abu Dhabi, around 5,000 units were added to the market last year, bringing the total housing stock to 284,000 units.

About 35,000 units are scheduled to enter the Dubai market in 2024 while around 8,000 units are expected to be completed in Abu Dhabi, according to projections from JLL MENA.

In its Q1 2024 report, JLL noted: “The residential market in Dubai experienced a strong start to the new year, with around 10,000 units completed over the first quarter, raising the total stock to 729,000 units. Looking ahead, an additional 25,000 units are scheduled for delivery over the remaining 9 months. These units will primarily consist of apartments located in prominent areas such as MBR City, Business Bay, Jumeirah Village, and Dubai Land.”

“In Abu Dhabi, there was a steady delivery of 1,600 units, contributing to a total stock of 286,000 units. Moreover, an additional 6,000 units are anticipated to be added by the end of the year,” JLL MENA added.

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Rental yields in Dubai and Abu Dhabi are moderate to good

In Dubai, gross rental yields are good, averaging 7.24% in April 2024, nearly unchanged from a year ago, according to Reidin.com. By property type:

Apartments: rental yields were 7.66% in April 2024, slightly up from 7.58% a year earlier.
Villas: rental yields stood at 5.59%, slightly down from 6.01% in the previous year.

In Abu Dhabi, gross rental yields were slightly lower than that of Dubai, but remain relatively good at an average of 6.46% in April 2024 – not significantly different from 6.37% a year earlier.

Apartments: gross rental yields stood at an average of 6.82% in April 2024, up from 6.61% in the same period in the prior year.
Villas: rental yields were 5.31% in April 2024, down from 5.7% a year ago.

A recent study conducted by the Global Property Guide showed that gross rental yields in the UAE averaged 5.16% in Q1 2024, up from 4.93% in Q3 2023. Gross rental yields in Dubai and Abu Dhabi are higher than the national average, at 6.3% and 5.68%, respectively.

Yields in Dubai are good, but the days when Dubai generated stratospheric yields are gone. Also, this can be a volatile market. Home prices swing up and down frequently.

Yields are lower in other emirates and cities. Raz al Khaimah yields averaged 4.69% in Q1 2024; Ajman at 5.23%; and Sharjah at 3.92%.

Rents surging in Dubai, rising moderately in Abu Dhabi

Rental rates of residential properties are surging in Dubai, and increasing modestly in Abu Dhabi, according to Reidin.com.

In Dubai, rental rates for all residential units were up by a whopping 20.75% in April 2024 from a year earlier. Rental rates for apartments surged by 21.79% y-o-y, while rents for villas increased 13.12% y-o-y over the same period.
In Abu Dhabi, the average rental rate for all residential units increased by a more moderate 8.49% y-o-y in April 2024. Over the same period, rental rates for apartments rose by 9.24%, while it increased by 4.84% for villas.

The increasing rents in the UAE can be attributed to strong demand. For instance, in Dubai, in Q4 2023, “there has been a notable 1% increase in the overall number of rental transactions compared to the previous quarter. Renewed contracts have shown a significant 9% increase, indicating a positive trend in the growth and vibrancy of the rental market,” noted Reidin.com in its report. “In comparison to the same period last year, the total number of rental contracts has increased by 7%, with renewed contracts experiencing a substantial 19% rise and new contracts declining by 11%.”

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This is in line with Asteco´s Q4 2023 Dubai Real Estate report, which showed that average apartment and villa rents in Dubai rose strongly by 15% and 14% y-o-y, respectively, in 2023.

“Whilst rental rates continued their upward trajectory, there are indications that they might be approaching a point of equilibrium. A notable metric reinforcing this observation is the growing variance between listings and contracted rates, as documented by the Dubai Land Department (DLD). There has been a rise in rental increases exceeding RERA stipulations (for existing tenants) and consequently, a surge in eviction notices as tenants challenged landlords,” noted the Asteco report.

“Affordability has definitely been a focal point this year with many long-term tenants finding themselves priced out of their familiar buildings/communities,” stressed Asteco in an earlier report.

Rents in specific high-end developments in Dubai in Q4 2023:

At the DIFC, a special economic zone in Dubai, rents ranged from AED110,000 (US$29,948) per annum for one-bedroom apartments to AED220,000 (US$59,897) for three-bedroom apartments.
In Downtown Dubai, home to the towering Burj Khalifa skyscraper rents for one-bedroom apartments averaged AED115,000 (US$31,310) per annum, while rents for three-bedroom apartments stood at AED250,000 (US$68,065).
In Palm Jumeirah, the world´s largest man-made island, rents ranged from AED155,000 (US$42,200) per annum for one-bedroom apartments to AED260,000 (US$70,787) for three-bedroom apartments.
In Sheikh Zayed Road, home to most of Dubai´s skyscrapers including the Emirates Towers, rents ranged from AED 100,000 (US$27,226) to AED 157,500 (US$42,881) per annum.

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In Abu Dhabi, the apartment rental market has also been growing, but more modestly, with average rents increasing by an average of 3% y-o-y in 2023.

“In recent years, the Abu Dhabi real estate landscape has observed dynamic shifts in rental rates, influenced by a surge in new residential supply. Notably, low- and mid-quality properties within Abu Dhabi City faced increased pressure from newer, better quality development which has prompted rental adjustments,” said Asteco. “In contrast, prime and high-quality apartments experienced substantial annual increases, ranging from 5% to 10%, contributing to an overall average annual growth of approximately 3% across the market.”

Rents for high-end properties in Abu Dhabi in Q4 2023:

In Central Abu Dhabi, annual rents for one-bedroom apartments averaged AED 60,000 (US$16,336); two-bedroom apartments for AED 98,000 (US$26,681); and three-bedroom apartments for AED 128,000 (US$ 34,849).
In Corniche, annual rents ranged from AED 65,000 (US$17,697) for one-bedroom apartments to AED 138,000 (US$37,572) for three-bedroom apartments.
In Al Khalidiya/Al Bateen, annual rents ranged from AED 73,000 (US$19,875) for one-bedroom apartments to AED 160,000 (US$43,561) for three-bedroom apartments.
In Al Raha Beach, annual rents were from AED 75,000 (US$20,420) for one-bedroom apartments to AED 175,000 (US$47,645) for three-bedroom apartments.
At Marina Square, one-bedroom apartments were rented for AED63,000 (US$17,152) per year and three-bedroom apartments for AED 135,000 (US$36,755).

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Rental laws

The Real Estate Regulatory Agency (RERA) is the regulatory branch of the Dubai Land Department (DLD) that is in charge of implementing tenancy rules and regulating the relationship between the landlord and tenant. The four main tenancy laws in Dubai include:

Law No. 26 of 2007: regulates the relationship between landlords and tenants in Dubai
Law No. 33 of 2008: amended certain provisions of Law No. 26
Decree No. 26 of 2013: established the Rent Disputes Settlement Centre (RDSC), which supervises all types of rental disputes in Dubai
Decree No. 43 of 2013: governs rent increases in Dubai

Since December 2013 rent caps have been imposed by Dubai Decree No. 43/2013 (the “New Decree”). The rent cap also applies to special development areas and free zones, including the Dubai International Financial Centre (DIFC).

In 2024, rent increases are as follows:

CURRENT RENTAL LAW
Rental rates	Allowable rent increase
If the existing rent is:
Equal to or 10% below the average market rental rate	Nil
11% to 20% below the average market rental rate	5%
21% to 30% below the average market rental rate	10%
31% to 40% below the average market rental rate	15%
More than 40% below the average market rental rate	20%

However, landlords can increase rents only at the time of renewal of the lease. The DLD requires landlords to provide tenants with at least 90-day notice before the rent increase.

Recently, a new draft law was proposed that will freeze rents in Dubai for three years, but it has never come to fruition.

In Abu Dhabi, the 5% annual rent cap remains in force, which was reinstated in December 2016 after it had been abolished in 2013. Further in October 2018, the Abu Dhabi Judicial Department issued new rules that will make it easier for landlords to evict tenants. The new rules allow landlords with lease contracts registered with Abu Dhabi Municipality to approach the Enforcement Department directly to claim outstanding rent and repossess their property. Previously, landlords had to go through a legal process to evict a tenant, which typically takes up to 6 months.

Abu Dhabi has also strengthened the protection of off-plan buyers. Its recent real estate law (No. 3 of 2015) appoints Abu Dhabi´s Department of Municipal Affairs (DMA) as the real estate regulator, performing the same functions as Dubai´s RERA. The reforms, as outlined by The National, include:

A central government database/register for all property projects in Abu Dhabi, including off-plan sales;
Developers are only allowed to charge DMA-approved administrative fees, and are barred from collecting registration fees from investors;
Rules are laid down for the creation of owners´ associations;
Developers are only allowed to sell off-plan units if they own real estate right over the project land. A “disclosure statement” is also required, providing information on the development to home buyers.
Developers marketing off-plan units are required to open an escrow account.
In case of “substantial prejudice”, off-plan buyers can terminate their purchase.
Developers will be fined by the DMA if their projects are delayed by more than six months. If there is a significant delay, the new law allows for the cancellation of projects or the appointment of a new developer.
A 10-year liability period for developers regarding structural building defects

The key interest rate kept at 5.40%

In May 2024, the Central Bank of the UAE kept its key overnight deposit facility unchanged at 5.40%, following the US Fed´s decision to keep the interest on reserve balances unchanged. The move followed six consecutive rate hikes in the past nineteen months.

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The UAE´s base rate for overnight deposits is linked to the US Fed´s interest on excess reserves (IOER).

Mortgage interest rates in Dubai have, in the past, followed key US Fed rates, because the dirham (AED) is pegged to the US dollar at AED3.67 = US$1. Some banks offer mortgage loans to both nationals and expatriates.

However, due to the continuous increase in key interest rates to tame inflation, mortgage owners with variable rates in the emirates have seen their mortgage interest rates surge from 2% to 3% annually to 6% to 9%. Some homeowners are even paying more than 10% mortgage rates.

The mortgage market continues to strengthen

Despite a surge in interest rates, the mortgage market continues to expand strongly. During 2023, mortgage transactions in Dubai hit AED 121 billion (US$32.94 billion) through 33,280 real estate dealings.

This is because cash buyers account for the majority of transactions in Dubai, making the market less sensitive to mortgage interest rate changes. For instance, in Q3 2023, mortgage transactions accounted for 8,238 deals, while cash deals accounted for 16,485 deals (except off-plan sales) in the emirate, according to ValuStrat.

In contrast, Abu Dhabi depicts a different scenario, where mortgage transactions are more dominant than cash deals. In Q3 2023, there were 1,247 mortgage transactions in the emirate, as compared to 890 cash transactions (excluding off-plan sales).

Mortgage rules were introduced in October 2013 to regulate the market:

UAE FEDERAL MORTGAGE CAPS (MAXIMUM LOAN-TO-VALUE RATIO)
	First home (Owner-occupier)	Second home or investment property	Off-plan purchase
NATIONALS
Property valued under AED5 million (US$1.36 million)	80%	65%	50%
Property valued over AED5 million (US$1.36 million)	70%	65%	50%
EXPATRIATES
Property valued under AED5 million (US$1.36 million)	75%	60%	50%
Property valued over AED5 million (US$1.36 million)	65%	60%	50%
Sources: UAE Central Bank, Cluttons

In March 2020, LTV ratios on mortgages for first-time homebuyers, both for nationals and expatriates, were raised by 5%, to alleviate the economic conditions caused by the Covid-19 pandemic. It remained at that level since.

More fixed-rate mortgage products have been introduced in the last decade, and “Fee-free” products have allowed borrowers to switch to a new lender at a lower cost since the last quarter of 2010.

Crude oil prices remain volatile

Brent oil prices reached a decade-high of US$120.08 per barrel in June 2022, amidst the ongoing Russian invasion of Ukraine. However, the international oil market was adversely impacted by the growing rift between Saudi Arabia and UAE last year.

With increasing oil prices in 2021, UAE pushed for increased oil production within the OPEC+, so that it can invest in its diversification plan before oil demand dries up. The country is upset about the low baseline from which its production is calculated. Abu Dhabi has invested billions of dollars in recent years to increase its production capacity.

However, Saudi Arabia, OPEC´s de facto leader, has refused the said concession, causing a rare public clash between the two allies. Neither side appears ready to budge, clouding the outlook for oil prices. In fact, in March 2023, the UAE is reportedly contemplating leaving the powerful cartel.

But in August 2023, OPEC and its allies agreed to gradually increase oil supplies to the market in 2024, ending the spat between the two oil powerhouses.

In April 2024, Brent oil prices increased by 7.1% to an average of US$90.05 per barrel as compared to US$84.11 per barrel in the same period last year. However, it remains 25% below the recent peak price level of US$120.08 seen in June 2022, according to figures released by the World Bank.

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UAE economy gathering pace

“The economy continues to grow, benefitting from strong domestic activity,” said Mr. Ali Al-Eyd of the IMF. According to the IMF, non-hydrocarbon GDP was estimated to have expanded by more than 4% in 2023, driven by tourism, construction, and real estate developments. Moreover, social and business-friendly reforms, as well as the country´s safe haven status continue to attract foreign inflows of capital and labor, resulting to a strong growth in real estate prices, especially in the high-end market.

Economic growth will strengthen this year, with the expected rise in oil production. The IMF projects the UAE economy to grow by 4% in 2024 while the UAE central bank is a bit more optimistic, expecting a real GDP growth rate of 4.2% this year. Growth will increase further to 5.2% in 2025, according to the central bank.

Abu Dhabi remains very dependent on oil revenues while Dubai is more focused on trade, travel, and tourism.

Inflation stood at 3.36% in February 2024, down from 3.6% in the previous month and 4.32% in the same period last year, according to the National Bureau of Statistics. Nationwide inflation averaged just 1.1% in 2011-2021 before rising to 4.8% in 2022 and to 3.1% in 2023, based on IMF figures.