UAE’s property market shows no sign of cooling off, says CBRE

UAE’s property sector broke a decade-long record for home sales last year and the strong activity and performance levels in the country’s real estate market are expected to continue into 2024, according to property research firm CBRE.

CBRE, said in a report, that average residential prices in Dubai surged by 20.1 per cent in the year to December 2023, with apartment and villa prices rising by 19.8 per cent and 21.8 per cent, respectively.

The report showed that 39,190 residential units were delivered in 2023, with 34.4 per cent of this new stock estimated to have been completed in Meydan One, Downtown Dubai, and Business Bay.

Furthermore, 68,880 units are expected to be handed over in 2024, with 22.7 per cent scheduled for delivery in Business Bay, District Seven, and Damac Lagoons.

The average apartment prices in Abu Dhabi, the UAE’s capital, rose by 1.1 per cent in the year to Q4 2023 while villa prices remained almost unchanged from the comparable period a year earlier.

CBRE said despite a slowdown in the emirate’s rental activity, average apartment rents still rose by 2 per cent year-on-year (YoY) to reach Dhs64,996.

Similarly, villa rents in Abu Dhabi increased slightly to reach an average of Dhs163,098.

However, the property research firm highlighted that the number of registrations in Q4 2023 dropped by 12.6 per cent YoY, driven by an 18.4 per cent plunge in renewed rental registrations and a 2.2 per cent decrease in new contracts registered.

“The UAE’s real estate market concluded another stellar year, with performance and activity levels reaching multi-year, if not historic, record highs in many sectors,” said Taimur Khan, head of Research – MENA at CBRE in Dubai.

UAE’s hospitality sector

Abu Dhabi hotels received 4.94 million visitors in 2023, a 29 per cent YoY increase and a 9.9% increase from the pre-pandemic levels. Dubai registered a 19.4 per cent increase in international visitors compared to the previous year, bringing the total to 17.2 million.

“Given these elevated visitation levels, the UAE’s average occupancy rate rose by 4.5 percentage points YoY in 2023,” according to CBRE.

The property research firm said the average daily room rate (ADR) grew by 2.6 per cent, and revenue per available room (RevPAR) rose by 9 per cent, highlighting the strong performance of the UAE’s hospitality sector.

Going forward, the UAE’s position as a global tourism and business hub, together with relaxed visa regulations, is expected to continue to drive growth in the hospitality sector’s key performance indicators (KPIs).

Similarly, the UAE’s industrial and logistics market remained strong in 2023 despite the limited stock availability.

The total number of rental contracts registered in Abu Dhabi advanced by 15.3 per cent while new registrations jumped by 24 per cent and renewed contracts rose by 9.6 per cent.

However, the total number of rental registrations marginally in Dubai declined by 0.04 per cent YoY, according to Dubai Land Department data. Rental rates will continue to improve in the UAE’s industrial and logistics sector, albeit at a slower pace.

Read: Dubai welcomed 17 million international visitors in 2023