UAE residential market ends 2023 on a strong note, says expert
ABU DHABI, February 20, 2024
The UAE’s residential market ended 2023 on a strong note with soaring demand driving the market's performance, according to top real estate expert CBRE.
The robust levels of activity and high levels of absorption will continue to support price growth in both Abu Dhabi and Dubai in the year ahead, stated CBRE in its UAE Residential Market Review Q4 2023.
Strong performance continues to be seen in the UAE’s residential market on the back of strong demand levels, it added.
In capital Abu Dhabi, the total volume of residential transactions reached 11,235 in 2023, up by 77.8% from the year prior. This increase has been underpinned by a 104.0% growth in off-plan market sales and a 27.7% increase in secondary market sales.
In Q4 2023, a total of 3,107 transactions were registered, marking a year-on-year growth of 40.3%. Over this period, off-plan transactions grew by 41.0%, and secondary market transactions rose by 38.1%.
In the year to the fourth quarter of 2023, average apartment prices in Abu Dhabi increased by 1.1%, whilst average villa prices remained almost unchanged from the comparable period a year earlier, said the report.
Average apartment rents in Abu Dhabi increased by 2.0% and average villa rents marginally increased by 0.8% in the year to the fourth quarter of 2023. Considering recent rental registrations that occurred in Q4 2023, average apartment and villa annual rents reached AED 64,996 and 163,098, respectively, it stated.
On the supply front, a total of 2,961 units have been delivered in Abu Dhabi in 2023, with 59.4% of this stock being delivered in Shams Abu Dhabi and Najmat Abu Dhabi.
In this year ahead, an additional 4,438 units are expected to be completed, with 69.1% of this new stock expected to be delivered in Yas Island and Al Maryah Island, it added.
On Dubai, CBRE said average residential prices rose by 20.1% in the year to December 2023, where over this period, average apartment and villa prices increased by 19.8% and 21.8%, respectively. In the rental market, although demand remains relatively elevated, we continue to see further moderation.
The rate of rental growth has softened throughout the year, where in the year to December 2023, average residential rents in Dubai increased by 18.9%, down from the19.2% growth registered in November 2023.
In terms of supply, a total of 39,190 residential units are estimated to have been delivered in 2023, with 34.4% of this supply being located in Meydan One, Downtown Dubai and Business Bay. A further 68,880 units are expected to be handed over in 2024.
In December 2023, activity levels softened amidst a contraction in the off-plan market, where a total of 6,216 transactions were registered in Dubai’s residential market, down by 30.3% from the year prior. This softening has been driven by a 69.7% drop in off-plan sales, whilst secondary market sales increased by 35.3%.
That being said, despite this monthly slowdown, in 2023, the total volume of transactions reached 118,993. This is the highest figure ever recorded over this period, surpassing the 2022 record total by 29.6%. this period, off-plan transactions increased by 31.9% and secondary market transactions increased by 26.3%.
Looking ahead, CBRE said price growth in both Dubai’s apartment and villa segments of the market are likely to remain relatively strong; however, the rate of price growth will likely taper off.
"The UAE’s residential market ended the year on a strong note, where the elevated levels of demand continue to drive performance. The robust levels of activity, high levels of absorption, which have reduced available supply, will continue to support price growth in both Abu Dhabi and Dubai in the year ahead," said Taimur Khan, the Head of Research.
"In terms of rental growth, we expect that rental rates in Abu Dhabi will continue to rise, with prime areas set to outperform the market. In Dubai, we expect that rental growth will continue to moderate, however, still remain positive in 2024," he added.-TradeArabia News Service
