JEDDAH: The UAE’s real estate market ended 2024 on a strong note, with Dubai’s residential sales soaring 30 percent year on year to 119 billion dirhams ($32.4 billion) in the fourth quarter.
According to CBRE Middle East’s latest market review, property transactions surged and rental prices climbed across key sectors — commercial, residential, retail, and industrial — driven by strong economic expansion and investor demand.
The UAE real estate market saw strong growth in 2024, driven by rising demand, limited supply, and increasing prices across residential, commercial, retail, and industrial sectors, supported by new regulations.
This trend is part of a broader regional shift, with property markets in Saudi Arabia, Qatar, and the UAE implementing reforms to better meet global investor demand.
For example, Saudi Arabia recently allowed foreigners to invest in Saudi-listed companies that own real estate in Makkah and Madinah, following a key decision by the Kingdom’s Capital Market Authority.
“The UAE’s real estate market continue to attract rising foreign investor interest, supporting record residential transactional volumes across Dubai and Abu Dhabi during 2024. Commercial sectors also remain buoyant, with demand largely outstripping supply, as reflected in the rising occupancy and rental rates across the office, retail and industrial markets,” said Matthew Green, head of research MENA at CBRE.
In the fourth quarter, residential transactions in Abu Dhabi rose by 19 percent, while office occupancy rates in both Dubai and the capital city hit 94 percent, pushing rents up by 15-20 percent annually due to supply constraints.
“Amid these highly positive market dynamics, the UAE government has moved to ensure the long-term sustainability of the real estate market, by implementing several new regulations in recent weeks,” said Green.
He said that these changes were aimed at improving transparency through the Dubai Smart Rental Index, expanding the addressable market via recent changes to Dubai’s designated Freehold areas, and cooling the off-plan market through the UAE Central Bank’s amendment to lending regulations on transactional set-up fees.
The UAE’s economic growth further fueled the commercial market, with Abu Dhabi’s real gross domestic product expanding by 4.5 percent in the third quarter of 2024, driven by a 6.6 percent increase in non-oil sectors. The rise in new business licenses and corporate expansions drove strong tenant demand, particularly for premium office spaces, the report added.
Residential sector
Dubai’s residential sector saw an 18 percent rise in apartment prices and a 20 percent increase in villa prices, pushing average values to 1,647 dirhams and 2,024 dirhams per sq. foot, respectively. Transaction volumes soared, with total residential sales in 2024 reaching 434 billion dirhams, up 33 percent from 2023, the report noted.
Abu Dhabi’s residential market followed suit, with apartment prices rising 11 percent and villa prices climbing 12 percent. The capital’s sales activity was led by a 59 percent surge in ready property transactions, while off-plan sales grew 5 percent but still accounted for 66 percent of total volume.
Rental contract registrations in Dubai rose 7 percent year on year, with renewal contracts up 9 percent and new registrations increasing 5 percent. Despite rising costs, CBRE noted that tenants continued to prefer lease renewals to avoid steep rent hikes.
