UAE Property Market Thrives in Q1 2024 with 20% Growth
The first quarter of 2024 saw robust growth in every sector of the UAE property market to start the year. According to CBRE Group’s most recent UAE Residential Market Review Q1 2024, Dubai’s overall transaction volumes hit 35,310 in Q1 of 2024—a 20.5 per cent yearly increase—setting a new record.
According to Taimur Khan, head of research at CBRE, “the strong levels of activity and high absorption levels, which have reduced available supply, will continue to support price growth in both Abu Dhabi and Dubai over the remainder of the year.”
Transaction volumes in Abu Dhabi
According to CBRE’s UAE market study, the number of real estate transactions in Abu Dhabi increased by 22.6 per cent to 2,795. The organization credits a 34.5 per cent surge in secondary market sales and an 18.1% increase in off-plan purchases for this gain. The average cost of an apartment in Abu Dhabi and a villa there grew by 2.3 per cent and 4.3 per cent, respectively, in Q1. Furthermore, the typical rental rates for apartments and villas have gone up by 4.5 per cent and 1.1 per cent, respectively.
Notably, 46,130 residential rental contracts were signed in Q1 2024 in Abu Dhabi’s rental market, representing an annual fall of 10.9 per cent. According to the research, this loss is the result of a 2.4 per cent drop in new rental registrations and a 15.5 per cent decline in rental contract renewals.
“We anticipate continued growth in rental rates in Abu Dhabi, with prime areas expected to outperform the market,” Khan continued.
Transaction volumes in Dubai
In Q1 of 2024, Dubai’s overall transaction volumes hit a new high of 35,310, highlighting the booming property market in the United Arab Emirates. Secondary market sales increased by 15.2 per cent, while off-plan trades increased by 23.9 per cent. Dubai broke all previous records in March alone, as transaction volumes increased by 13.2 per cent to the greatest monthly total ever. Off-plan sales and secondary market sales grew by 20.2 per cent and 2.2 per cent, respectively, during this time frame. The first quarter of 2024 saw an acceleration in price rise in the Dubai real estate market, with average prices rising by 20.7 per cent. In addition, the average price of a villa rose by 22.1 per cent and that of an apartment by 20.4 per cent.
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Within Dubai’s top market category, the total number of sales transactions showed a 2.1 per cent yearly fall in Q1 2024. Super-prime transactions, on the other hand, fell 16.5 per cent on an annual basis to 227. According to CBRE, this reduction is the result of a large decline in off-plan sales brought on by limited availability and strong demand. In Dubai, average super-prime prices increased by 14.8% per year, while average prime prices increased by 16 per cent. CBRE anticipates continued growth in Dubai’s home sales industry going forward. It predicts that prices would rise, albeit not at the same rate, for both the apartment and villa parts of the market. The analysis projects that residential rents will keep rising in the rental market. This growth rate will probably level down, though.
Transactions volume in Al Ain and the Northern Emirates
The Northern Emirates demonstrated resilience and the promise for continued progress during Q1 2024, as seen by their exceptionally good performance. The average yearly growth rate for apartment rental rates in the Northern Emirates was 9%, with a 4% quarterly rise observed in high-end buildings relative to standard apartments. In terms of rental rate increases, Ras Al Khaimah led the way, closely followed by Sharjah and Ajman. Across all asset types, average rental rates in the Al Ain market were mostly stable. This performance has been supported by consistent demand, mostly from within the country.
Although the cost of renting an apartment has remained relatively constant, there have been some changes, especially in the very price-sensitive lower-end market. On the other hand, premium villas had notable yearly rental rises of up to 8%, however, the rate of increase depended on variables including condition and location.
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Future Projections
Going forward, CBRE anticipates that Dubai’s residential real estate market will continue to grow. Although not at the same rate, prices will rise in both the apartment and villa portions of the market. Regarding rentals, we predict that the cost of living will keep rising. Having said that, the growth rate will probably slow down.
“The UAE’s residential market started the year on a relatively strong note, where the elevated demand levels continue to drive performance,” says Taimur Khan, Head of Research MENA at CBRE in Dubai. For the rest of the year, the price rise in Abu Dhabi and Dubai will be supported by robust activity and high absorption levels that have decreased the available supply.
Regarding the growth of rental prices, we anticipate that Abu Dhabi will continue to see increases, with premium neighbourhoods expected to outperform the market. Residential rentals in Dubai will rise, but not as quickly as they have been lately. We anticipate that the rate of change will slow down in the second half of the year.
In summary
Both residents and investors find Dubai’s real estate market to be quite appealing. Dubai’s position as the world leader in the real estate industry is poised to be cemented with its consistent expansion and innovation-focused approach. To take advantage of the exciting prospects, keep yourself informed, do your research, and make wise judgments as you navigate this changing market.
