UAE property sector flourishes Dubai prices surge 20.7% in Q1 2024

The UAE's real estate market has commenced 2024 with robust expansion across various sectors during the first quarter. According to CBRE Group's latest UAE Residential Market Review Q1 2024, Dubai witnessed a remarkable surge in total transaction volumes, reaching 35,310, marking a significant annual increase of 20.5%, setting a new record high for Q1 of the year.

Taimur Khan, CBRE's head of research, emphasized, "The strong levels of activity and high absorption levels, which have reduced available supply, will continue to support price growth in both Abu Dhabi and Dubai over the remainder of the year."

In Abu Dhabi, property transaction volumes experienced a notable growth of 22.6%, totaling 2,795 transactions. This surge was attributed to an 18.1% rise in off-plan sales and a substantial 34.5% increase in secondary market sales. Average apartment and villa prices in Abu Dhabi increased by 4.3% and 2.3%, respectively, while rents for apartments and villas rose by 4.5% and 1.1%, respectively.

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However, Abu Dhabi's rental market witnessed a decline with 46,130 residential rental contracts in Q1 2024, marking a year-on-year decrease of 10.9%. This drop was attributed to a 15.5% decrease in rental contract renewals and a 2.4% decline in new rental registrations. Khan noted, "In terms of rental growth, we expect that rental rates in Abu Dhabi will continue to rise, with prime areas set to outperform the market."

Meanwhile, Dubai's real estate market experienced a surge in transaction volumes, reaching a record high of 35,310 in Q1 2024. Off-plan transactions surged by 23.9%, while secondary market transactions saw a 15.2% increase. March witnessed a new record high for Dubai, with transaction volumes hitting the highest monthly figure on record, rising by 13.2%. During this period, off-plan sales and secondary market sales increased by 20.2% and 2.2%, respectively.

Price growth in Dubai accelerated during Q1 2024, with average prices surging by 20.7%. Average apartment and villa prices increased by 20.4% and 22.1%, respectively. Despite a 2.1% annual decline in total sales transactions within Dubai's prime market segment, super-prime transactions dropped by 16.5% year-on-year to 227, attributed to a significant decrease in off-plan sales due to high demand and limited supply. Average prime prices saw a year-on-year increase of 16%, while average super-prime prices grew by 14.8%.

CBRE anticipates continued growth in Dubai's residential sales market, with prices in both the apartment and villa segments expected to rise, albeit at different rates. In the rental segment, residential rents are forecasted to continue increasing, albeit at a moderated pace.