Asteco's Q3 2024 real estate report reveals a dynamic UAE property market characterised by sustained growth in Abu Dhabi, continued momentum in Dubai and increasing activity in the Northern Emirates.
According to the report, the Abu Dhabi market is well-positioned for growth, driven by new developers entering the market and a significant pipeline of planned developments.
The report also shows that the Dubai government's proactive approach to enhancing the Emirate's physical, social, technological and legal infrastructure, combined with robust underlying fundamentals, is expected to contribute to solid market conditions and resilience against external factors.
Abu Dhabi residential and office market
According to the report, approximately 950 residential units were completed and delivered across Abu Dhabi, notably in areas such as Noya on Yas Island, Jubail Island and Al Raha Beach. This period also witnessed the announcement and launch of several key residential projects, totalling approximately 2,560 units.
The strategic partnership formed between Aldar Properties and Mubadala Investment Company to create four joint ventures focused on owning, managing and developing real estate assets, will further contribute to future supply. Asteco anticipates additional project announcements throughout the remainder of 2024, driven by a substantial pipeline of residential and mixed-use developments currently in the planning and early development phases.
The residential rental market in Abu Dhabi maintained its positive momentum during the third quarter, with landlords retaining an advantage due to strong leasing activity fuelled by localised demand. Rental rates for apartments increased across all areas, averaging 1% quarterly and 4% annually, with high-end properties experiencing growth of 2% to 5%. The villa market also demonstrated strong performance, with Saadiyat Island, Khalifa City and MBZ City leading the way with up to 5% quarterly growth from the previous quarter. Overall, villa rents saw average increases of 2% quarterly and 4% annually, while office rents grew an estimated 3% and 8%, respectively.
1,850 residential transactions
Q3 2024 saw approximately 1,850 residential transactions, with a preference for ready properties (1,070 sales) over off-plan purchases. Apartment sales prices continued their upward trajectory, with an overall quarterly and annual increase of 4% and 8% respectively. Several areas recorded price appreciations exceeding 10% over the past 12 months.
Villa sales prices saw a 2% quarterly and 4% annual increase, with prime communities on Saadiyat Island registering over 25% year-on-year growth. Demand for off-plan developments remained strong, with recently launched projects achieving record absorption rates that set new benchmarks in Abu Dhabi.
Dubai residential and office market
The Dubai market saw a surge in new handovers in Q3 2024, particularly in the apartment segment, which witnessed nearly 50% increase in completions, with approximately 8,100 units entering the market. Q4 2024 is expected to see the handover of an additional 14,900 residential units, consisting of 11,800 apartments and 3,100 villas, although some handovers may spill over into 2025. Whilst new office completions remained limited, there was a notable increase in project launches, including large-scale Grade A developments.
Apartment and villa rents continued to rise, with quarterly increases of 3% and 2% respectively, partially influenced by the updated RERA rental index, which has given certain landlords the flexibility to request larger rent increases upon lease renewal.
Sales prices for apartments and villas increased by 3% and 4%, respectively, compared to the previous quarter. Off-plan activity remained robust, driven by attractive payment plans and developer reputation.
The sustained high demand for off-plan properties has led some developers to introduce aggressive payment plans, with structures reaching as high as 80/20 or 75/25, which may present challenges for lower-income individuals and families, particularly those seeking larger apartments or villas.
Dubai sales price growth continued unabated, particularly in the office sector. The office market experienced average quarterly and annual increases of 5% and 21%, respectively. This surge is primarily attributed to strong economic and business conditions, combined with a limited supply, particularly of Grade A and Grade B+ properties.
Al Ain and Northern Emirates market
During Q3 2024, Asteco observed an increase in tenants relocating from Dubai to the Northern Emirates, driven by affordability and lifestyle factors. However, it is worth noting that rental rates also rose in the Northern Emirates, albeit remaining significantly lower than most of Dubai’s communities, with the added benefit of larger unit sizes. The Northern Emirates’ sales market returned a strong performance, with sustained demand and upward price trends across various property types.
The Al Ain real estate market maintained its positive trajectory in Q3 2024, with rental rates rising across most asset classes. Strong demand in the residential sector prompted landlords to seek rent increases, typically between 2% and 5%, for tenancy renewals. Several villa communities reported average rental increases of 2% compared to the previous quarter and the same period last year.
Furthermore, mature apartment buildings registered rental growth of approximately 2% over the quarter and 1% year-on-year, whilst office rental rates across the city rose by 4% on average, quarterly and annually.--TradeArabia News Service
