Off-plan sales in Dubai’s residential market grow 50.3% in third quarter
A recent report by JLL highlighted the UAE real estate market’s continued robust performance in Q3 2024, overcoming global challenges thanks to its resilience and strong economic fundamentals.
The report noted a significant increase in the volume and value of real estate transactions, with expectations for sustained growth supported by strategic government policies and infrastructure development. Taimur Khan, Head of Research for the Middle East and Africa at JLL, stated:
“Despite challenging global conditions, the UAE’s real estate market demonstrates remarkable resilience and strong growth across all sectors. Investor confidence in Dubai and Abu Dhabi remains robust, with premium assets seeing rising prices due to an increased focus on quality. We anticipate this momentum will persist in Q4 and beyond, offering promising opportunities for both local and international investors.”
Residential Market: Significant Growth in Dubai and Abu Dhabi
Dubai:
- Off-plan sales surged by 50.3% year-on-year in Q3, driving a 35.6% increase in transactions year-to-date.
- 7,400 units were delivered in Q3, with an additional 13,500 units expected in Q4.
- Apartment rents rose by 19.1%, while villa rents increased by 12.5%, reflecting strong demand for high-quality housing.
- Lease renewals accounted for 62.0% of all contracts, highlighting demand outpacing supply growth.
Abu Dhabi:
- Secondary market sales grew by 44.3%, with apartment prices increasing by 8.5% and villa prices by 8.1%.
- Apartment rents rose by 9.3%, and villa rents increased by 3.9%.
- Off-plan sales declined by 67.2%, resulting in a 40.8% drop in total transactions.
- The focus on quality is expected to drive demand for luxury properties in Q4.
Hospitality Sector: Sustained Growth Fueled by Tourism
Abu Dhabi:
- Hotels welcomed 2.4 million guests between January and May 2024, with occupancy rates increasing by 7.1%.
- The average daily rate rose by 12.2% to AED 527, and revenue per available room (RevPAR) grew by 23.6% year-on-year.
Dubai:
- RevPAR rose by 2.7% year-to-date through September, driven by a surge in tourist arrivals.
- Projects like Marsa Al Arab and Dubai Islands are set to redefine luxury, intensifying competition and enhancing guest experiences.
Office Space: Rising Demand Drives Rental Growth
Abu Dhabi:
- Average rents for Grade A office spaces rose by 10.8% year-on-year, with lease contracts increasing by 44.4%.
- Vacancy rates dropped to 4.1%, with 70,100 square meters of new office space expected in Q4.
Dubai:
- Premium office rents increased by 8.3%, Grade A rents by 14.7%, and Grade B rents by 15.3%.
- Vacancy rates in the Central Business District fell to 5.2%, with local and regional companies more willing to pay higher rents than international firms.
Outlook
The report concludes that the UAE real estate market is on track for continued growth, driven by strategic government initiatives and ongoing infrastructure advancements, paving the way for more investment opportunities in Q4 2024 and beyond.
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