The JLL report on the performance of the UAE real estate market during the third quarter revealed a 44.3% increase in secondary market sales in the Abu Dhabi residential market during the third quarter, with apartment prices increasing by 8.5% and villas by 8.1%, compared to last year. Rents also increased by 9.3% for residential apartments and 3.9% for villas.
However, off-plan sales rates decreased by 67.2%, which was reflected in the total number of transactions, which decreased by 40.8%, compared to last year.
The report expects the trend towards quality to boost demand for premium properties in the fourth quarter, meaning that these properties will outperform the rest of the market segments, which witnessed, during the third quarter, a limited number of residential units entering the market, but 3,500 units are expected to enter the fourth quarter.
Hospitality Market: Abu Dhabi’s hospitality and hotel market has performed strongly, driven by increasing visitor numbers, with the capital’s hotels welcoming 2.4 million guests between January and May 2024, particularly in key destinations such as Yas Island and Saadiyat Island.
The period from the beginning of the year to September saw impressive growth: occupancy increased by 7.1%, average daily rate by 12.2% to AED 527, and revenue per available room increased by 23.6%. Government initiatives such as the Abu Dhabi Tourism Strategy 2030 and upcoming events are expected to drive continued growth in the fourth quarter.
Continued demand for prime and Grade A assets in Abu Dhabi’s tenant market led to a 10.8% year-on-year increase in average rents in Q3 2024. The number of leases increased by 44.4%, driven by a 65.9% increase in new contracts and a 7.7% increase in lease renewals.
Low office vacancy rates (4.1%) and increased demand from both established and new entrants are expected to drive growth in Q4, with 70,100 sqm of office space added to the total supply.