The Dubai real estate sector saw double-digit increases to property rent and sales figures last year, according to a report by Asteco.
According to the Asteco 2023 Q4 real estate report, the UAE market witnessed unprecedented growth during 2023 despite the various global challenges.
The report anticipates continued positive trajectory over 2024. Key strategic initiatives, including the UAE Tourism Strategy 2031 and ‘We the UAE 2031,’ are expected to fortify the UAE’s standing as one of the premier destinations globally.
Dubai real estate analysis
In 2023, record-breaking figures were observed in terms of individual unit sales values, transactional volumes and project launches.
Asteco said, the surge in transitioning annual leases into short-term rental properties for short-term gains and the lag in new deliveries stemming from Covid related development delays have amplified the supply-demand dynamics at play, and ultimately resulted in heightened rental pressure.
In 2023, Dubai recorded a flurry of new project launches. The launches (by volume of units) reached levels not seen since pre-Global Financial Crisis.
Residential supply increased significantly with the delivery of an estimated 34,950 residential units (a 13 per cent increase from 2022), comprising 27,450 apartments and 7,500 villas in Dubai.
Meanwhile, the commercial sector registered the delivery of approximately 650,000 sq. ft. of new office space.
While residential rental rates continued their upward trajectory, rental growth slowed towards the end of the year.
Average apartment and villa rents increased by 2 per cent and 3 per cent over the final quarter of 2023, and by 15 per cent and 14 per cent year-on-year.
In the commercial sector, however, the strong rebound which started in 2022, continued unabated.
There was a notable surge in demand and pricing, particularly for Grade A office space.
Demand has been stimulated by new entrants and existing companies looking to increase their footprint.
In Q4 2023, despite the moderation in sales price growth, transactional volumes remained robust, particularly in the off-plan sector.
Average sales price growth for apartments and villas experienced a modest increase, averaging 1 per cent and 2 percent over the quarter, while annual growth stood at 10 per cent and 12 per cent, respectively.
The luxury residential segment continued to set new records across both beachfront locations and desert destinations.
Asteco anticipates the delivery of over 45,000 residential dwellings and approximately 500,000 sq ft of office space over the course of 2024.
It is worth noting that, as in previous years, certain projects in Dubai may face delays, potentially leaning into 2025.
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