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Yet more positive forecasts for the real estate market in 2024: The UAE’s property market will continue to grow in 1H 2024, albeit at a slightly slower rate than in 2023, on the back of increased demand from expats and ultra-high net worth individuals, Kuwait Financial Centre (Markaz) said in its UAE real estate report (pdf). The rental market is also expected to remain stable during the first half of the year, the report added.
ICYMI #1-Most analysts expect real estate prices to continue to grow this year, particularly in Dubai, albeit at a slightly slower rate from 2023. Real estate services firm Cushman & Wakefield expects real estate prices to rise up to 12% y-o-y in Dubai, while S&P Global Ratings expects a 5-7% jump, with risk of a cyclical slowdown. Morgan Stanley also sees “continued tailwinds” for the market and thinks the market this year will be “less of a boom than 2023.”
ICYMI #2- We ran a deep-dive into the reasons behind the property price boom in 2023, and a breakdown of different analysts’ and pundits’ outlook for the market this year.
Chinese investors to push Dubai’s property market to growth: Chinese investors are turning to Dubai’s luxury property segment amid pressure on the property market back home and an ease of travel restrictions, the report notes. In 1H 2023, Chinese investments made up 7% of total sales for Emaar Properties, doubling from 3-4% during the same period the year before.
A demand for limited office space could drive price growth in the market in both Dubai and Abu Dhabi,the report adds. In 3Q 2023, the average occupancy rate in Dubai’s office segment rose to 92.4%.
The retail segment is expected to attract more landlords, who are becoming more selective with tenant choice, as demand persists for “quality assets,” the report said. Dubai is expected to see more growth as malls begin to offer more amenities, while Abu Dhabi’s growth will be driven by an increase in tourism activity.
On the downside, higher interest rates could impact mortgage demand, which could drive consumers towards rentals, the report said. The US Federal Reserve’s higher-for-longer monetary policy — which the Central Bank of the UAE is expected to mirror due to the peg of the AED to the USD — could weigh on the demand for mortgage loans in the coming year.
The hospitality sector is also expected to continue to grow, with the report forecasting an additional 6k rooms in Dubai and 200 rooms in Abu Dhabi to be rolled out by the end of the year, owing to the start of the winter season and more upcoming events.
