In the wake of challenging global economic conditions, the UAE continued to show its resilience and leading property expert JLL revealed that there was robust growth in the real estate sector.
The property expert stated that almost all major asset classes in UAE’s real estate sector recorded strong growth in 2023, particularly the residential and office sectors.
The UAE’s residential sector benefitted from continued developer activity and strong demand, which saw both primary and secondary markets experience a remarkable growth in transactions in 2023.
In November 2023, there was a significant increase of 19% recorded in both rental rates and average sale prices in Dubai as compared to the same period a year earlier.
Notably, there was an upward trajectory seen in the average villa sale prices in Dubai due to increase in demand.
This saw the prices reach an all-time high in November, as they surpassed the previous peak by 15%, which had been recorded back in 2014.
JLL revealed that during the year, the total number of units delivered in Dubai surpassed 36,000, with majority being apartments and this saw the total stock increase to 719,000 units.
A 51% year-on-year increase in value was recorded in Dubai, while volume increase stood at 43% from January to November 2023.
The total transaction values in Abu Dhabi also recorded a significant rise, as the off-plan segment recorded successful launches.
These values recorded an annual surge of 102% and the volume rose 77%, as compared to the same period a year earlier.
There was consistent growth in the capital throughout the year, with a 2% and 5% rise recorded in rental rates and sale prices, respectively, on an annual basis in the fourth quarter of 2023.
More than 5,000 units were completed in Abu Dhabi, which resulted in total stock reaching 284,000 units.
As for 2024, the total number of units scheduled for delivery in Dubai is 34,000, while the number of units scheduled for delivery in Abu Dhabi is 8,000.
The residential market of the UAE is expected to continue recording positive momentum in 2024. But, developers would have to incorporate the rise in construction costs and land prices.
This would lead to launches in secondary areas and a trend of smaller unit sizes would also emerge. JLL said that the office sector is growing not only because of new entrants.
It added that existing businesses interested in expanding their presence have also contributed to the office sector’s growth.
This has seen commercial real estate developers launch new projects to capitalize on the increasing demand.
Proactive measures have also been taken by some of UAE’s free zones for expanding their jurisdiction and launching new projects.
The total stock in Dubai increased to 9.2 million square meters with the delivery of gross leasable area (GLA) of 92,000 square meter.
The report from JLL said that this year will see an addition of another 44,000 square meters. As for the total stock in Abu Dhabi, it remained unchanged at 3.9 million square meter.