UAE real estate market thrives in Q2 2024: Key highlights

The UAE’s real estate sector demonstrated robust growth in the second quarter of 2024. Key highlights include a significant increase in off-plan sales in Dubai, stable villa rental margins in Abu Dhabi, and migration trends favouring Sharjah. 

These indicators reflect the resilience and dynamism of the real estate market across the emirates.

Economic context

Earlier this year, the International Monetary Fund (IMF) forecasted a 4 per cent growth for the UAE economy in 2024, driven by robust activities in tourism, construction, manufacturing, and financial services.

The latest report from Asteco, a comprehensive real estate agency, outlines the growth fundamentals within the real estate sector, emphasising continued expansion supported by strong economic fundamentals and government initiatives, for the industry.

Abu Dhabi: residential and office market

Abu Dhabi saw the addition of approximately 2,400 residential units, particularly in areas such as Noya on Yas Island, Jubail Island, Masdar City, and Al Raha Beach. 

Several residential and mixed-use projects are planned for public launch throughout 2024, expanding the city’s real estate landscape. 

Key launches included:

• Elie Saab Waterfront on Reem Island: 174 units
• Bloom Living Olvera in Zayed City: 288 units
• Bada Al Jubail on Jubail Island: 109 units

Al Fahid Island also unveiled an updated master plan for about 7,000 units.

Abu Dhabi recorded 2,135 sales transactions in Q2 2024, with off-plan sales making up 57 per cent. 

Apartments led in both off-plan and ready sales, with a 6.8 per cent quarterly increase.

Ready property transactions grew by 2.8 per cent quarterly and 33.1 per cent annually, while off-plan sales declined by 23.4 per cent annually due to fewer project launches.

Read: Abu Dhabi’s luxury real estate boom: 9 projects to watch

Rental Market

The rental sector in Abu Dhabi remained active, particularly in upscale apartment and villa locations. Average apartment rents increased modestly by 1 per cent quarterly and 2 per cent annually. 

Villa rents showed a steady 5 per cent increase over the past year. Prime residential areas, especially waterfront communities like Al Raha Beach, Saadiyat, Yas, and Al Reem Islands, saw high demand and occupancy rates, with some properties having waiting lists. 

Mid-end properties in prime investment areas grew over 5 per cent annually, while lower-end market properties remained stable due to attractive lease terms offered by landlords.

Office space

The office market witnessed a steady influx of private and corporate investments, driving demand for high-quality office spaces.

Grade A offices in prime locations saw a significant 10 per cent increase in rents compared to the previous year, with quarterly growth between 3 per cent and 8 per cent, especially for new contracts.

Dubai: residential and office market

Dubai’s real estate market continues to attract expatriates due to its strong economy and appealing lifestyle. Approximately 6,750 residential units were completed in Q2 2024, with ongoing project launches covering a diverse range of developments.

The Asteco report noted that an additional 25,000 units are set to be delivered in the second half of 2024, with some delays anticipated until 2025. 

Key launches included:

• Emaar’s Heights Country Club and Wellness: An 81 million square feet community
• Aldar’s Athlon community: Featuring 1,492 townhouses and villas
• Verdes by Haven: Offering 1,050 one-, two-, and three-bedroom units

Off-plan property sales

 The sales market in Dubai remained strong, driven by ongoing project launches that boost off-plan transactions. 

While Q2 2024 recorded a steady 2 per cent growth in average sales prices, several areas, including Jumeirah Village and Business Bay, experienced above-average sales price growth.

The report attributed this to a general increase in demand and in part to a significant rise in both off-plan launches and newly completed developments.

These new projects often feature superior quality compared to earlier ones in these areas and are priced accordingly. The off-plan property market continued to maintain remarkable momentum, with both local and international investors eagerly acquiring newly launched units, attracted by the promise of strong returns on investment in a tax-friendly environment.

However, it is worth noting a rise in the number of developers offering sales incentives, such as lower down payments, flexible and/or extended payment plans and promotional gifts.

Additionally, some lenders started offering enhanced financing options for off-plan properties, allowing buyers to secure up to 10 per cent more funding during construction.

This additional funding is typically available for projects with at least 50 per cent construction progress, ensuring a degree of risk mitigation for the lender.

This move not only stimulates the off-plan market but also broadens accessibility to potential buyers.

Rental market

Apartment and villa rental rates in Dubai increased by 3 per cent and 2 per cent quarterly, respectively. Annual growth moderated to single digits, with apartments rising 8 per cent and villas 4 per cent. 

The revised RERA rental index allowed landlords to implement larger rent increases upon lease renewal.

Office space

The office rental market thrived, especially for Grade A spaces, driven by robust demand and limited supply. The upward pressure on rents is expected to continue until new supply enters the market or business conditions change.

Sharjah and Northern emirates

Residential and office market

The Northern Emirates experienced tenant migration from Dubai to Sharjah, Ras Al Khaimah, and Ajman due to lower rental rates, improving development standards, and enhanced infrastructure. Rental growth for typical apartments outpaced high-end properties.

In Sharjah, Alef Group launched Nama 2 within Al Mamsha Raseel, featuring 174 apartments. 

Al Ain market

Al Ain’s residential rental market remained positive in Q2 2024. Apartment rental rates stayed stable, while villa prices increased by 2 per cent year-on-year.

Asteco’s Q2 2024 report highlights the UAE real estate market’s steady growth across different emirates. 

The sector benefits from strong economic fundamentals, government initiatives, and strategic investments, ensuring its resilience and dynamism.