Asteco Real Estate Services Company confirmed that the real estate market in Dubai continues to be flexible and attractive, which makes it a destination for investors, with expectations that the emirate will continue to attract a large number of expatriates, thanks to its strong economic performance, and its continued commitment to improving the quality of life and attracting specialized talent.
The real estate market report for the first quarter of 2024 issued by the company revealed that the Dubai market witnessed the delivery of more than 10,000 residential units during the first quarter, including 7,300 apartments and 2,750 villas. While this represents a significant increase compared to the previous quarter, this performance also paves the way for a promising path during the coming year, as it is also expected that an additional 30,000 units will enter the market by the end of 2024.
The report added: “As for the growth of the rental rate during the past three months, it combined two aspects. While the average rental prices for apartments and villas remained almost unchanged, the growth of the rental rate across different communities represented a state of variation. On an annual basis, growth rates declined to record single digits, as villas recorded a rate of 6%, while apartments recorded a rate of 10%.”
Data from the Dubai Land Department indicate a 4% decrease in the number of new contracts issued in the first quarter of 2024 compared to the previous quarter, and the same period last year. On the other hand, contract renewal volume rose by 5% quarter-on-quarter, and 12% year-on-year, with many tenants agreeing to above-average rent increases.
The report added: “As is the case in the rental market, the average selling prices for both apartments and villas remained relatively stable throughout the first quarter of 2024, with some differences noted at the level of residential complexes, and annual growth rates reached 6% for apartments and 8% for villas, respectively.”
The report indicated, the new year witnessed a gradual change in buyers’ preferences, as apartments in well-known complexes gained increasing attraction, such as Jumeirah Village Circle, Business Bay, Dubai Marina, and Downtown Dubai. Apartments usually achieve a higher return on investment, which is due to several factors such as lower initial investment costs, increased rental demand, high occupancy rates, and short vacancy periods.
The report indicates that during the first quarter, the Abu Dhabi market witnessed the completion of 800 residential units in many investment areas, a large portion of which was concentrated in the Al Raha Beach area. The most prominent developments witnessed by the emirate were the launch of the Yas Canal residential project, which is a huge and new villa project located in the same area. The region, and this project is expected to be completed by the last quarter of 2027, with the aim of delivering 1,146 units exclusively to citizens.
Throughout the first quarter of 2024, the villa and apartment rental market remained stable in general, as major and high-end projects witnessed great demand, which led to an increase in rents by 7% – 10% compared to the previous year, especially for new contracts, and the upward trend in high office space rental prices continued. Quality, which started in 2023, until 2024.
Some projects experienced an increase of between 5% and 7%, affected by various factors such as unit size and payment terms. The limited amount of prime office space in Abu Dhabi, coupled with increasing demand from expanding companies, driven by government efforts to attract foreign investment, has contributed to the rise in rental prices.