The latest UAE Real Estate Trends reveal that Dubai Rents increase by 20% while those in Abu Dhabi remain stable.

There are many reasons for the surge in Dubai Real Estate Market prices in comparison to that in Abu Dhabi. Great resilience is seen despite the inflation and interest rate increase in the Dubai Real Estate industry as revealed by Asteco.

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Rising Interest Rates and Price Trends in Dubai Property Market

Dubai Real Estate has outperformed its worldwide peers.

On the contrary, the off-plan properties and completed projects in Abu Dhabi also pushed to a new high in practically a decade.  

The comparative analysis of Abu Dhabi and Dubai revealed a greater rent increase in Dubai owing to the huge influx of Chinese investors, incoming liquidity from investments and businesses, increased property development taking place in the country, increased tourism and travel industry, and the changing consumer preferences.

The real estate industry in Dubai is shifting from its previous dynamics to a more brand-conscious luxury-based property market which requires newer and better versions of real estate in Dubai. Luxury Real Estate in Dubai is the latest property trend followed by Branded properties offering luxurious lifestyles, top-notch amenities, extravagant facilities, and world-class interiors.

UAE Real Estate Trends: Dubai Rents Increase for Residential Property and Office Market

According to Asteco, 11000 now residential units were developed and delivered in the second quarter of the year 2023, with the stock of apartments for sale in Dubai amounting to 9400 units.  On the contrary, the demand for villas for rent in Dubai and villas for sale in Dubai has decreased slowly, while it is expected to pick up during the second quarter of the year 2023.  

In light of the increasing demand trends in the Dubai Real Estate Market, the pace of property development and supply will increase further nearing to 20,000-unit completion as planned for years 2024 and 2025. As newer residential projects are in their production phase and launching, the real estate market dynamics keep changing according to the demands of newcomers and tenants.

Some areas like Arabian Ranches, Meydan, and Al Furjan did not see much rental growth as opposed to the other areas in Dubai. There were limited availabilities and increased demand for apartments for rent and apartments for sale in Dubai, in areas like Dubai Silicon Oasis (Cedar Villas), Jumeirah Beach Residence, Al Waha/ Layan Villas, and The Greens/ Views.

Meanwhile, the rental market is clustered by a huge influx of residents and expats willing to get the best possible apartment for rent in Dubai at the most reasonable price.

Office rents and Apartment rents increased by 6 percent while villa rents increased just by 3 percent over a span of three months. On the contrary, the annual rents increase for each was 25 percent, 21 percent, and 23 percent respectively. The price surge has continued to take up more pocket space for all asset categories, the pace has gradually slowed in some asset classes as opposed to others, especially in the villa segment.

Furthermore, demand for hybrid, top-notch co-working offices continues to increase with office rentals reaching new heights for Grade A spaces. Consequently, the sales prices for Dubai properties for sale are slowing down, with a quarterly increase of a mere 2 percent, 3 percent, and 4 percent for apartments, villas, and offices. While the annual charges were 14 percent for apartments, 15 percent for villas, and 22 percent for offices.

The beachfront locations like Jumeirah Bay Islands, Bluewaters, Palm Jumeirah, and Madinat Jumeirah Living. Furthermore, there are some trends related to the transition of tenants to homeowners is expected a shift in the second half of the year 2023/ beginning of the year 2024.

Real Estate Market in Abu Dhabi: Residential and Official

During the first half of the year 2023, there were 1400 new residential units which were launched in Abu Dhabi, with 850 new villas and 2200 more apartments in the process of development will be launched at the end of the year 2023. The majority of the latest supply of properties was delivered within Saadiyat Island and Al Reem Master plan communities. Apart from rental properties, there were the latest new properties for Sale in Abu Dhabi.

Meanwhile, there are several new projects being developed and expected to launch in 2023 end or early 2024. For instance, Murjan Saadiyat was the latest project launched, The Source and Jubail Island in Phase 3. As opposed to the increase in Dubai rents, the increase in rents in Abu Dhabi is not as much but still showed an increase between 2 percent to 5 percent.

The prime villa communities, that are launched in Yas Islands and Saadiyat are still the most wanted villa communities which is why the rental hikes by more than 10 percent during the same time period. On the other hand, there are mid- to low-end developments having very average rental rates and the changes are very nominal. The lower-end stock of residential properties is facing greater pressure from trending properties to expand their amenities, and improve the layouts to keep up with the changing dynamics of the industry.