Generally, Dubai and Abu Dhabi have a tendency to grab the headlines as hotspots for real estate property. But within the UAE, an under-the-radar Emirate is regularly gaining attraction as a rising star – Ras Al Khaimah. Otherwise referred to as RAK, this northernmost emirate is rising continuously. But may 2024 be the 12 months that Ras Al Khaimah breaks out of Dubai and Abu Dhabi’s shadow and asserts itself as a real property power player in its own right?
All signs and symptoms factor to yes. This blog will explore what’s fueling Ras Al Khaimah’s meteoric upward thrust, examine the key developments shaping its 2024 market, and discover why savvy traders are starting to see this ‘underrated gem’ as one of the UAE’s hottest possibilities. By the end, we guarantee you’ll be eager to participate in the RAK real estate property market movement. Let’s get started!
Surging Demand Drives Price Growth
Rental and sale prices in RAK have been on an upward trajectory throughout 2023 due to strong market demand. RAK Market Report, apartment sale prices increased 18.5% year-over-year in some areas. Rental costs have also risen, with rates for apartments climbing 7-11% across popular neighborhoods like Al Hamra Village.
Villa markets experienced a similar upside. Sales prices grew 3.55% on average and Hamra Village rents jumped 9.37%. The overall increases indicate a substantial rise in demand relative to available stock. They also point to growing interest in RAK as a second home or investment property location.
Market analysts project these price appreciation trends will spill into 2024. Cavandish Maxwell RAK CEO Karim Sadek stated he expects “further mid-single digit percentage price increases across all major RAK communities.”
Meanwhile, Knight Frank forecasts rental yields could reach 7-8% in 2024, further stimulating investment.
With robust economic and population growth underway in RAK, demand looks poised to outpace new completions again next year. This imbalance positions the market for continued price growth and makes 2024 an opportune time for buyers.
Mega-Developments Transform the Landscape
A major factor driving RAK real estate is the suite of mega-projects reshaping the Emirate. Chief among these is the $3.9 billion Wynn Ras Al Khaimah resort development. Slated for completion in late 2024, Wynn will be a global luxury tourism and leisure destination, serving as a magnet for visitors and second homeowners.
2026 will also see meaningful progress on other multi-billion dollar schemes like Marjan Island, Al Hamra Village, and Mina Al Arab. As these integrated communities roll out lavish villas, townhouses, waterfront apartments, and amenities over the next twelve months, they will significantly enrich RAK’s value proposition.
Not only will the developments absorb demand by delivering thousands of new homes, they will upgrade infrastructure, create jobs, and catalyze small business activity. The resultant economic stimulus should fuel RAK’s growth engine and sustain stronger market fundamentals through 2024.
Meanwhile, the projects are generating hype and putting RAK on the map for a broader audience of regional and international homebuyers. Increased visibility augurs well for continued interest in the market.
Population Growth Powers the Economy
RAK has grown its population rapidly in recent years and authorities project this expansion will gather further pace in 2024. This population influx is being driven by jobs creation underpinned by the emirate’s diversification away from oil. RAK’s growing economic strength also stems from its strategic location near key trading routes.
The freezone authority estimates 25,000 new jobs will be generated in 2024 alone. Combined with targets to double tourism arrivals and boost the SME and startup sector, these employment initiatives point to faster natural population growth. More residents mean increased rents and land values over the long run.
New Arrivals Boost Rental Demand
Strong economic opportunity is already pulling locals and expatriates to RAK. According to Bayut, searches on its portal from outsiders looking to rent in the emirate grew 35% in 2023. This indicates continued rental demand growth is on the horizon as more jobs are added.
Notably, searches from folks living in expensive markets like Dubai soared 80% last year as RAK emerged as an affordable alternative. With prices and rents still 40-60% below other northern emirates, this dynamic seems likely to perpetuate in 2024 as it remains an appealing ‘renter’s market’.
New renters will be necessary to absorb rising numbers of residential and commercial units delivered across RAK’s developing communities. Stable occupancy will support landlords and boost confidence in the market, maintaining positive total returns performance.
Affordability Attracts Buyers and Investors
RAK’s relative affordability has enticed homebuyers seeking better value amid inflationary pressures across the rest of the UAE. For example, a two-bed apartment’s average sales price is estimated to remain roughly 40% below comparable units in nearby Ajman and Sharjah in 2024.
This price differential also appeals to regional and international property investors who can realize higher yields in RAK. Reports suggest investment interest has been growing fast – especially from GCC, British, Russian and Indian purchasers.
Recent reforms further improving foreign ownership rights now allow 100% ownership of villas and shops in designated areas. These progressive policies create increased certainty for investors and pave the way for more capital inflows next year, accelerating RAK’s development trajectory in the process.
The Perfect Storm is Brewing
A confluence of factors has come together to supercharge Ras Al Khaimah’s appeal. Firstly, the emirate has stayed true to its roots even as Dubai became the flashy over developer. RAK retains an authentic charm with spectacular natural landscapes like lush mangroves, pristine beaches and the dramatic Hajar Mountains. This old-world feel, combined with world-class infrastructure, means it offers the best of both worlds for today’s lifestyle-oriented buyers.
Secondly, smart government initiatives are boosting the economy and population. Looking to diversify beyond oil, RAK has placed big bets on industries like tourism and logistics. In a masterstroke, it eliminated income tax in 2018, attracting flocks of international entrepreneurs and remote workers seeking a low-tax base. As a result, RAK’s population grew 14% between 2010-2020 compared to 8% nationally – one of the highest rates in the region.
Last but not least, the pandemic has upended real estate preferences. No longer satisfied with densely packed high-rises, people crave room to breathe with more living space, private amenities, and proximity to nature. RAK answers this call perfectly with its abundance of standalone villas, exclusive beachfront communities, and green spaces throughout cities like Al Hamra Village.
Factor all this together, and you have the perfect recipe for a real estate boom. Developers have certainly listened, flooding the market with new projects. The results have been striking – average apartment and villa sales prices in RAK surged 26-34% in 2021 alone, according to Cavendish Maxwell real estate consultants. For comparison, Dubai rates were in the single digits.
The Numbers Don’t Lie
So what’s the state of play currently in the RAK market? To get a clearer picture, let’s dive into some of the key data trends:
RAK developer RAK Properties is targeting an impressive AED 3 billion ($816 million) in sales for 2024, up 25% from 2023. Strong off-plan demand is driving this bullish outlook.
Average sales prices in the emirate jumped 15-20% year-on-year for the past two years, with Al Marjan Island studio apartment rates up a staggering 33.8%.
Rental yields for apartments range from 4.5 -11.7% depending on the area, well above long-term yields of 3-4% elsewhere in the UAE. Al Hamra Village mainly delivers at 4.59 -7.33%.
Prime freehold coastal land values have doubled from AED 600-800 per sqft to AED1,200-1,600. Depth of stock and development potential is fueling this growth.
According to a 2023 news launch, RAK Properties stated that occupancy levels and financials for their luxurious hospitality offerings surpassed projections. The employer’s sales multiplied by using 164% within the first half of 2023, and their net income improved by using 245%. RAK Properties also plans to expand new projects to capitalize on the excessive call for real property in Ras Al Khaimah.
A recent YouGov survey found 82% of tenants in RAK were ‘very satisfied’ with their renting experience due to affordable prices, amenities and community spirit compared to 64% nationally.
As the numbers indicate, RAK real estate is red hot right now. Ballooning prices, yields and occupancy demonstrate the market is firing on all cylinders with no signs of slowing. It appears we’re still in the early chapters of Ras Al Khaimah’s real estate growth story. Things are only going to get bigger in 2024 and beyond.
Exciting Launches in the Past Year
In the past year, Ras Al Khaimah (RAK) witnessed several exciting real estate launches that demonstrated the growing attractiveness of the property market. One of the major developers, RAK Properties, announced the sale of the first set of units at its project Quattro Del Mar located on Marjan Island in January 2024. The project will feature luxury apartments with views of the lagoon and beach.
Also in January 2024, RAK Properties unveiled plans for four towers called Hayat Island to be developed on a large land plot in Marjan Island. The towers will include hotel apartments as well as residential units.
In December 2023, Aldar Properties Phase 1 of the Nikki Beach Residences project launched on Marjan Island sold out completely, showing the strong demand and trend of growth in the RAK property market. Continuing its investments, Aldar Properties launched another beachfront living community named Nikki Beach Residences on Al Marjan Island in November 2023.
The project comprises serviced hotel apartments as well as residential properties located directly on the beachfront. RAK Properties also witnessed a huge 282% rise in its Q3 net profit driven by strong sales from new projects like Quattro Del Mar, highlighting the growth in RAK.
In October 2023, a new luxury branded residences project called Masa Residence was unveiled on Al Marjan Island with apartments priced between $1 million to $20 million, reflecting the increasing luxury real estate segment in the emirate.
DAMAC Upcoming Projects in Ras Al Khaimah
DAMAC Shoreline at Al Marjan Island is the new launch in Ras Al Khaimah. The project’s calmness, luxury and scale there is no equal; apartments and townhouses here are huge yet warm; they have great perspectives of gulf waters due to their location right on its shores. The best part is DAMAC Shoreline itself because it sits so close to sea beaches that one can walk over sand and enjoy a serene lifestyle. It doesn’t get better than this!
Key Highlights
- Property Types – Apartments & Townhomes
- Unit Types – 1, 2, 3, 4 and 5 bed
- Starting Price – AED 1,830,000
- Down Payment – 20%
- Payment Plan – 70:30
- Handover – Q 3 - 2028
Where the Smart Money is Going
With such a promising investment climate, it’s no surprise sophisticated capital is flooding in. AED multi-billion deals in 2021 included DP World’s acquisition of economic zones and Emirates NBD inking an AED 50 million escrow account agreement with RAK authorities for project funding.
But what specific areas and property types are shining brightest? Here are some of the top opportunities savvy players pursue in RAK:
Al Marjan Island: As the crown jewel development with its luxury hotels, ultra-exclusive villas and world-class lifestyle infrastructure, values here routinely grow 30% annually. Over AED1.5 million studio apartments illustrate the red-hot demand.
Al Hamra Village: This waterfront community mixes authentic charm with beaches, an 18-hole golf club, and new hotels/residential towers sustaining 15-20% price growth. Rental yields of 7-8% make it enormously appealing.
Mina Al Arab: An upscale dual island city surrounded by coral lagoons, this is one of the fastest-growing hubs. New launch Hayat Island offered rents of AED120k+ indicating strong investor pull.
Downtown RAK & Al Nakheel: Business is booming in these vibrant commercial districts with sky-high landlord demand for studio/1-bed apartments near metro stations. Tourism projects like Sas Al Nakhl enhance the appeal.
Master planned Projects like Carlton Residences , Ellington Views 2, and Falcon Villas offer resort-style living at family-friendly prices of AED 650-850 psft. Low supply of land parcels and villas underpins future capital appreciation.
As the market matures, look for yield-hungry players to target residential buildings and portfolios currently achieving 7-10% returns. RAK’s growth trajectory aligns perfectly with long-term ‘buy and hold’ strategies.
The Future is Bright
As an emirate serious about progress while respecting heritage, RAK is steadily emerging as one of the most dynamic places to live, work, and invest in the UAE. Its past success leaves little doubt the future will be even brighter. Here’s a glimpse at what’s in store:
Infrastructure Projects: A new AED4 billion airport expansion is underway, and an Etihad Rail freight station will boost connectivity. Expansions of roads, hospitals, and schools are also paving the way for the next development phase.
Real Estate Supply: At least 600 units are scheduled for handover in 2024, overwhelmingly focused on family-oriented and luxury beach communities. This will absorb ongoing demand from local, regional, and international buyers.
Population Growth: The goal is to welcome over 3 million residents by 2030, growing RAK’s GDP. An influx of multinational companies will attract high-income tenants.
Tourism Draws: New beachfront resorts by Anantara, Mandarin Oriental, and Rotana, plus attractions like Wadi Adventure and Ras Al Khaimah National Museum, will boost visitor numbers by 50% by 2025.
Business Hub Status: RAK is making it easier than ever for entrepreneurs to set up shop through initiatives like free zones focused on innovation, logistics, and green industries.
As you can see, the stage is perfectly set for Ras Al Khaimah’s ascension. Early birds can earn outsized, life-changing returns by riding the real estate wave before valuations inflate to Dubai/Abu Dhabi levels. What are you waiting for?! Start browsing listings and book your trip to experience RAK’s magic in 2024. This is one opportunity you don’t want to sleep on.
The Bottom Line
All signs point to 2024 being a pivotal year that could mark the arrival of Ras Al Khaimah on the mainstream real estate stage. As mega-projects transform the emirate and a virtuous economic and demographic expansion cycle takes hold, the RAK housing market seems poised for robust growth.
The surging demand, swelling population, affordability benefits and high yields mean both buyers and investors have compelling incentives to consider RAK. Those who act early and choose the suitable locations stand to capitalize on the emirate’s rapid ascent. With all momentum indicators flashing green, 2024 shapes up as the year RAK real estate comes into its own.
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