The beginning of the year 2024 saw more than 10,000 new units come into the market in Dubai’s residential property market. According to JLL’s most recent report, there will be a total of over 35,000 completed houses by the end of the year due to high demand from investors. This exceptional growth is as a result of new creative projects, appealing payment schedules and updates in the UAE golden visa programme.
First Quarter Completions
Approximately 10000 units were completed in Dubai in Q1 of 2024. This shows how strong the real estate sector is in the UAE if we add the 1600 completions from Abu Dhabi. The total number of housing stocks in Dubai has reached 729000 units. Another 25000 units and 6000 units are set to be delivered in Abu Dhabi and Dubai respectively by end of the year.
Sales Transactions on the Rise
Dubai saw a 20% year-on-year increase in residential sales transactions in Q1 2024. Abu Dhabi followed closely behind with a 17% uptick. While villas and townhouses saw healthy activity, most transactions focused on apartments. This indicates a shift towards smaller, more affordable housing options.
Shift to Secondary Locations
Rising land values and material costs are pushing developers towards secondary, peripheral areas of Dubai. Additionally, most new projects are targeting properties priced around AED 2 million. This allows buyers to qualify for golden visas, which grant 10-year residency rights. Laws were recently updated to allow property purchases of AED 2 million, down from AED 5 million, to be eligible.
Strong Rental Growth
Robust demand drove Dubai rents up 21% year-on-year in Q1 2024. Apartment and villa rents increased 22% and 14% respectively**. This shows apartments outpacing villas due to being more affordable. Meanwhile in Abu Dhabi, average rents grew 4%, with apartments seeing slightly stronger 5% growth over villas.
Sale Prices Also Rising Rapidly
In line with rents, Dubai’s sales prices grew 21% in the first quarter. However, unlike rentals, villa sale prices significantly outpaced apartments with 22% growth. This indicates high demand for houses from end-users, families, and high-end investors. Abu Dhabi saw more moderate but steady 7% annual home price growth between apartments and villas.
Hospitality Sector Expanding Too
Tourism has roared back strongly post-pandemic, driving hospitality and hotel growth. In Dubai, around 2,000 keys were added during the first quarter, mainly 5-star establishments. Another 5,000 hotel rooms are expected to be ready in 2024, while Abu Dhabi’s total hotel key count remained steady at 32,500 with a mere 500 additional openings expected this year.
Robust Tourism Figures
Thanks to surging visits and occupancy, hospitality metrics remained strong in early 2024. Dubai welcomed 3.67 million visitors in January and February, an 18% bump over 2023. Key feeder markets were Europe, South Asia, and GCC countries. Average daily hotel rates (ADRs) grew 5% to $226, pushing revenue per available room (RevPAR) up 5% to $185 as well. Abu Dhabi saw 81% hotel occupancy in Q1 along with 8% ADR growth to $161. As a result, RevPAR jumped 17% to reach $130.
The Outlook Remains Bright
Buoyant tourism activity, updates to visa rules, and attractive new developments continue driving interest and growth in Dubai Real Estate. Developers are shifting towards secondary areas and smaller units to keep supply aligned with demand. Meanwhile, hospitality metrics confirm steadily rising visits and occupancy into 2024. If the current trajectory holds, Dubai is headed for another record-breaking year of housing completions. Investor and end-user demand remain resilient in the face of global uncertainty. For those looking to buy in Dubai, now remains an opportune time before prices and rents potentially rise further.
