Residential prices in Dubai experienced a notable 20.1 percent increase in the year ending December, accompanied by a 19.8 percent rise in apartment prices.
Last year, the real estate market in the UAE set a record for home sales, breaking a decade-long streak. CBRE, a property research firm, anticipates that the robust activity and performance levels observed in the country’s real estate sector will persist into 2024.
In a report, CBRE stated that residential prices in Dubai experienced a notable increase of 20.1 percent in the year leading up to December 2023, with apartment prices rising by 19.8 percent and villa prices by 21.8 percent.
According to the report, 39,190 residential units were completed in 2023, and approximately 34.4 percent of this new stock was finalized in Meydan One, Downtown Dubai, and Business Bay.
Additionally, it is projected that 68,880 units will be handed over in 2024, with around 22.7 percent scheduled for delivery in Business Bay, District Seven, and Damac Lagoons.
The average prices of apartments in Abu Dhabi, the capital of the UAE, increased by 1.1 percent in the year ending in Q4 2023, while villa prices remained nearly unchanged compared to the same period a year earlier.
Despite a slowdown in rental activity, CBRE noted that average apartment rents in Abu Dhabi still saw a year-on-year increase of 2 percent, reaching Dhs64,996.
Similarly, villa rents in Abu Dhabi experienced a slight increase, averaging Dhs163,098.
Nevertheless, the property research firm pointed out that in Q4 2023, the number of registrations dropped by 12.6 percent year-on-year, driven by an 18.4 percent decrease in renewed rental registrations and a 2.2 percent reduction in newly registered contracts.
Taimur Khan, Head of Research – MENA at CBRE in Dubai, commented, “The UAE’s real estate market concluded another outstanding year, with performance and activity levels reaching multi-year, if not historic, record highs in many sectors.”
UAE’s hospitality sector
In 2023, hotels in Abu Dhabi welcomed 4.94 million visitors, experiencing a 29% year-on-year increase and a 9.9% rise from pre-pandemic levels. Dubai also saw a 19.4% surge in international visitors compared to the previous year, reaching a total of 17.2 million.
CBRE reported that with these heightened visitation levels, the average occupancy rate in the UAE increased by 4.5 percentage points year-on-year in 2023. The hospitality sector demonstrated robust performance, with the average daily room rate (ADR) growing by 2.6%, and revenue per available room (RevPAR) increasing by 9%.
Looking ahead, the UAE’s status as a global tourism and business hub, coupled with more lenient visa regulations, is expected to sustain growth in key performance indicators (KPIs) for the hospitality sector.
Similarly, the industrial and logistics market in the UAE remained resilient in 2023 despite limited stock availability.
In Abu Dhabi, there was a 15.3% advancement in the total number of registered rental contracts, with new registrations surging by 24%, and renewed contracts rising by 9.6%.
On the other hand, Dubai experienced a marginal 0.04% year-on-year decline in the total number of rental registrations, according to data from the Dubai Land Department. Rental rates in the UAE’s industrial and logistics sector are projected to continue improving, albeit at a slower pace.
