UAE Real Estate Market Review Q4 2023

The strong activity and performance levels in the UAE’s real estate market expected to continue into 2024

February 13, 2024 15 Minute Read


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Key Takeaways:

  1. The UAE’s GDP is estimated to have grown by 3.0% in 2023, based on data from Oxford Economics, up from the 2.8% forecast published a quarter earlier. This rate of growth is expected to improve further in 2024 to reach 4.7%.
  2. Activity levels in Dubai’s occupier market remained resolute throughout the last quarter of 2023, where, based on data from the Dubai Land Department, the total number of rental contracts registered reached 47,234, up by 34.7% compared to the year prior.
  3. The increased occupancy levels continue to underpin growth in rental rates in Dubai’s office market, where average rents within the Prime, Grade A, Grade B, and Grade C segments of the market have increased by 8.0%, 13.3%, 18.2%, and 20.3%, respectively in the year to the last quarter of 2023.
  4. On the back of the elevated levels of demand in Abu Dhabi’s occupier market, we have also seen an improvement in rental rates in the last quarter of the year, where average Prime, Grade A, and Grade B rents grew by 0.5%, 3.4%, and 4.8%, respectively, in the year to Q4 2023.
  5. Average apartment prices in Abu Dhabi’s residential market increased by 1.1% in the year to Q4 2023, whereas average villa prices remained almost unchanged from the comparable period a year earlier.
  6. Dubai’s residential sales market continues to register strong levels of price growth, where average prices increased by 20.1% in the year to December 2023, up from the 18.9% growth registered a month earlier. Over this period, average apartment prices rose by 19.8%, and average villa prices rose by 21.8%.
  7. In 2023, a total of 118,993 residential transactions had been registered in Dubai; this is the highest total recorded to date, surpassing the 2022 record figure by 29.6%. Off-plan sales grew by 31.9% throughout this period, and secondary market sales increased by 26.3%.
  8. Strong performance continues to be seen in the UAE’s hospitality segment of the market throughout 2023, given elevated visitation levels. The UAE’s average occupancy rate rose by 4.5 percentage points year-on-year in 2023.
  9. In the retail market, rental performance has improved further on the back of current market fundamentals, where in the year to the last quarter of 2023, average retail rents in both Abu Dhabi and Dubai grew by 10.7% and 17.6%, respectively.
  10. In the industrial segment of the market, in the year to the last quarter of 2023, average rental rates in Abu Dhabi grew by 7.3% and in Dubai by 14.8%.