According to a recent report, Dubai’s residential real estate market experienced remarkable growth in the second quarter of 2024, with a record-breaking 35,310 transactions – a 20.5 percent year-over-year increase. This surge was driven by the rising popularity of customizable units and stable investment returns.
Driving factors
The study, conducted by UAE real estate firm Primo Capital, revealed that the rise was fueled by a 23.9 percent rise in off-plan property sales and a 15.2 percent increase in secondary market deals. This trend reflects the enduring confidence of prospective buyers and strong demand within the industry.
Customer-centric construction
“The shift by leading developers in the UAE from one rigid design to a customer-centric construction has boosted activity,” explained Mohammad Zeaiter, senior property advisor at Primo Capital. “Giving buyers the freedom to choose, change and customize according to their tastes and preferences is a major reason for the growth.”
Attracting international investors
Moreover, the lucrative real estate market in Dubai continues to attract international investors, as it “guarantees steady ROI (return on investment) and higher capital gain” compared to other major metropolitan cities, added Zeaiter.
Positive growth in Abu Dhabi
The report also highlighted positive growth in Abu Dhabi’s residential sector, with villa prices increasing by 2.3 percent and apartment prices by 4.3 percent year-over-year. Additionally, Dubai’s commercial real estate market displayed impressive performance, with average rents rising by 22.2 percent annually and 17.1 percent quarterly, driven by the expanding needs of companies within the thriving UAE economy.
Industrial and hospitality sectors
The industrial and logistics sector also saw annual rental rate increases of up to 14.3 percent, attributed to heightened demand for warehouses and storage facilities. The hospitality sector maintained a strong performance, with a 0.9 percentage point annual increase in average occupancy rates.
Read more: Dubai’s mortgage market at 14-month high: Top areas seeing highest activity
Retail rental rates
Retail rental rates in Abu Dhabi and Dubai experienced average rental rises of 14.7 percent and 10.5 percent, respectively, over the year preceding the first quarter of 2024, reflecting a supply-demand mismatch and heightened commercial activity.
Sustained growth outlook
Real estate agents at Primo Capital foresee sustained growth in the UAE’s real estate market, driven by factors such as a robust economy, significant return on investment, higher capital returns, and favorable government policies.
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