According to a report, Dubai’s residential sector saw an 18 percent rise in apartment prices and a 20 percent increase in villa prices. Reuters/File
UAE’s Real Estate Market Concludes 2024 with Strong Growth
JEDDAH: The UAE’s property sector wrapped up 2024 on a high note, with Dubai’s residential sales experiencing a notable 30 percent year-on-year increase, reaching 119 billion dirhams ($32.4 billion) in the fourth quarter.
As outlined in CBRE Middle East’s latest market analysis, real estate transactions saw a significant surge, while rental rates climbed across key segments—including commercial, residential, retail, and industrial properties—fueled by robust economic growth and heightened investor interest.
The UAE’s real estate landscape flourished throughout 2024, bolstered by growing demand, constrained supply, and escalating prices across all major property categories. The sector’s upward trajectory was further reinforced by new regulatory measures aimed at sustaining long-term market stability.
This trend mirrors a wider regional transformation, with Saudi Arabia, Qatar, and the UAE enacting reforms to align with evolving global investment trends.
For instance, Saudi Arabia recently granted foreign investors the ability to purchase stakes in Saudi-listed firms owning properties in Makkah and Madinah, following a landmark ruling by the Kingdom’s Capital Market Authority.
Investor Confidence Fuels Market Growth
“The UAE’s property market continues to attract increasing foreign investor interest, propelling record-breaking residential transactions in both Dubai and Abu Dhabi throughout 2024. Commercial real estate remains robust, with demand outpacing supply, as evidenced by rising occupancy levels and rental rates across the office, retail, and industrial sectors,” stated Matthew Green, head of research MENA at CBRE.
In the fourth quarter, Abu Dhabi’s residential transactions increased by 19 percent, while office occupancy rates in Dubai and Abu Dhabi reached 94 percent, leading to annual rental hikes of 15-20 percent due to limited availability.
“Given these strong market dynamics, the UAE government has introduced several regulatory measures to ensure long-term market stability in recent weeks,” Green added.
These initiatives focus on enhancing transparency via the Dubai Smart Rental Index, expanding market accessibility through updates to Freehold-designated areas, and regulating the off-plan segment through the UAE Central Bank’s adjustments to lending rules on transaction setup fees.
The UAE’s economic expansion further strengthened the commercial real estate sector, with Abu Dhabi’s real GDP rising by 4.5 percent in Q3 2024, driven by a 6.6 percent increase in non-oil industries. The surge in business licenses and corporate expansions spurred higher demand for premium office spaces, according to the report.
Residential Market Sees Significant Gains
Dubai’s residential sector experienced steady price growth, with apartment prices climbing 18 percent, while villa prices surged by 20 percent, bringing average rates to 1,647 dirhams and 2,024 dirhams per square foot, respectively. Transaction volumes hit new records, with total residential sales in 2024 reaching 434 billion dirhams, marking a 33 percent rise from 2023.
Abu Dhabi mirrored this growth, witnessing an 11 percent rise in apartment prices and a 12 percent increase in villa prices. The capital’s market activity was primarily driven by a 59 percent jump in ready property sales, whereas off-plan transactions grew by 5 percent, still comprising 66 percent of total transactions.
Additionally, Dubai’s rental market remained active, with rental contract registrations increasing 7 percent year on year. Renewals saw a 9 percent rise, while new rental contracts climbed 5 percent. Despite mounting rental costs, CBRE’s report highlighted that tenants preferred renewing leases to avoid steep price hikes.
