Where real estate prices went in 1Q 2024, according to CBRE: The average prices of residential apartments in Dubai surged by 20.4% during 1Q 2024, while Abu Dhabi's average apartment prices saw a more moderate increase of 4.3% y-o-y, according to UAE Real Estate Market Review Q1 2024 (pdf) by commercial real estate agency CBRE. Average villa prices in Dubai increased by 22.1%, much higher than Abu Dhabi’s 2.3% increase during the period.

Dubai’s rentals have shot up: Dubai experienced accelerated rental growth in 2024, with average residential rents increasing by 21.2% y-o-y in March, up from 20.4% the previous month. Apartment rental rates rose 22.1% while villa rental rates rose 14.5%.

Abu Dhabi’s rentals weren’t as high: The residential rental market in Abu Dhabi saw a decline in 1Q 2024, with a 10.9% y-o-y drop in rental contracts driven by a 15.5% decrease in renewals and a 2.4% decrease in new registrations. Average apartment rents rose by 4.5%, while villa rents increased by 1.1%.

REFRESHER- Real estate consultancy JLL had pegged the increase in sales prices and rentals in Dubai at 21% y-o-y during the quarter. According to JLL, Abu Dhabi experienced less inflated price hikes, with sales prices increasing by 7% y-o-y, and rental rates by 4% y-o-y. Apartment rentals and sales prices for villas both surged 22% y-o-y, indicating robust demand for both types of properties.

Unit deliveries are looking healthy in both Emirates: Dubai saw 6.5k units delivered in 1Q 2024, mainly in Meydan One, Jumeirah Village Circle, and Al Furjan, while an additional 46k units are expected throughout the year, primarily in District Seven, Damac Lagoons, and Business Bay, though delays are anticipated. Meanwhile Abu Dhabi received 80 units in Al Raha Beach in Q1, with 8.6k more expected by year-end, mainly in Yas Island, Al Sowwah, and Al Shamkha.

Dubai’s residential sales are expected to continue their upward trajectory, albeit with a more moderate increase. Dubai’s residential sales transactions above AED 5 mn rose 27.2% y-o-y , while those above AED 10 mn surged 42.5% y-o-y, with off-plan sales continuing to dominate. However, traditional prime and super-prime locations experienced declines, with prime transactions dropping by 2.1% and super-prime transactions decreasing by 16.5%.

RETAIL AND HOSPITALITY-

The size of Abu Dhabi's retail rentals market witnessed an 8.1% slowdown in 1Q 2024, while Dubai saw a marginal 0.2% uptick, with the report taking stock of increased interest in Dubai’s prime segment, with demand outweighing supply.

Both cities experienced rental growth, with Abu Dhabi's rents rising by 14.7% and Dubai's by 10.5% in 1Q 2024.

ON THE HOSPITALITY SIDE- Abu Dhabi’s hospitality sector saw robust growth with hotel guests increasing 22% y-o-y during 1Q. Dubai also welcomed 5.18 mn international visitors, marking a 10.9% y-o-y increase.

OFFICES AND INDUSTRIAL-

Dubai saw a 35.8% y-o-y surge in office rental registrations in 1Q 2024 driven primarily by SME demand, while core business district areas showed slower growth, according to CBRE. Abu Dhabi saw a 9.1% y-o-y in total office rental contracts, mainly fueled by government-linked entities.

The UAE’s industrial real estate market fared well in 1Q 2024 despite limited stock, according to the report. Abu Dhabi witnessed a 4.7% y-o-y increase in rental registrations, driven by a 9% rise in new contracts, notably from the manufacturing sector. Similarly, Dubai saw a 3.2% y-o-y increase in rental registrations.

Limitations in infrastructure and a shortage of new construction projects contributed to the limited stock, and prompted a more landlord- favored market with limited tenant incentives.

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