Dubai real estate sector to deliver 34,000 units in 2024

Despite the global economic slowdown, experts anticipate that the property market in the United Arab Emirates will continue to thrive in 2024.

Dubai is expected to deliver around 34,000 units, while Abu Dhabi aims to complete approximately 8,000 units. This positive outlook is supported by solid economic fundamentals, government initiatives and growing investor confidence. In a round table entitled “Navigating the growth spectrum: exploring strategies for sustained success” hosted by jll, experts highlighted the potential for sustained growth across various asset classes in the dynamic UAE market. They emphasized that the real estate sector, in particular, is expected to maintain its upward trend, taking advantage of the strong growth and high buyer demand seen in 2023.

James Allan, CEO Middle East and Africa (MEA) at JLL, stated that the real estate sector has become a key component of the UAE’s diversification strategy, demonstrating resilience and strength. He anticipates the industry will continue to perform well in 2024, even amid inflationary challenges. Allan emphasized that the optimistic outlook and positive investment climate provide stability amid global uncertainties, further cementing the UAE’s appeal as an attractive destination for regional and international real estate investors.

During the panel discussion, experts predicted that although the residential real estate segment continues to see annual increases in both transaction value and volume, the growth rate is likely to slow over the next year.

While luxury homes remain a niche market, there is notable growth in branded residences, wellness-focused developments and lifestyle-oriented projects. Additionally, co-living spaces are gaining popularity because they offer affordable, convenient and inclusive living options, especially for young and single professionals.

Despite the challenges of rising land prices and construction costs, positive momentum in the UAE residential market is expected to persist into 2024. Dubai aims to deliver around 34,000 units, while Abu Dhabi anticipates completing approximately 8,000 units.

Property Monitora leading provider of real estate technology and market intelligence, forecasts that Dubai’s thriving residential market will see the completion of more than 40,000 units in 2024, following the launch of almost 100,000 new units in 2023. The real estate sector, which saw its largest increase annual price increase of 16.4 per cent in more than a decade last year, will continue to contribute to the strong supply expected in the coming years, according to a recent Property Monitor report.

Speakers at the jll The panel event noted that with growth in private and sovereign wealth, as well as increasing infrastructure spending, the outlook for the real estate sector across the GCC region looks promising. This region is less affected by global challenges such as inflation and interest rate increases.

“The positive sentiment and performance of various macroeconomic indicators demonstrate confidence and resilience in the UAE and GCC markets. Dubai remains a dominant force in the region’s real estate sector.”

said the experts of jll.

Experts highlighted that the UAE’s status as a financial and business hub has led to increased demand across various asset classes, with global institutions actively seeking investment opportunities in the country. They emphasized that the residential, hotel and office sectors remain the highest performing segments, driven by the UAE’s high desirability index. In commercial real estate, there are gaps between supply and demand for high-quality spaces, making it a competitive landscape. Core asset classes continue to attract interest in the UAE capital market, with prime office and hospitality yields expected to surpass the 7.0 per cent threshold due to aggressive pricing strategies applied by asset managers.

Additionally, experts noted a growing focus on sustainability and technological innovations, which are reshaping the real estate landscape. Green building practices and energy-efficient designs are increasingly important, and financial institutions are expanding their lending offerings for green projects.

In Dubai, there has been a rise in off-plan luxury property launches. The most sought after residential segment is properties priced below Dh3 million, creating opportunities for developers to cater to the growing demand for affordable housing options.

In both cities there was a notable increase in demand for office space. Landlords continued to maintain a strong position in the market as rents increased due to the limited availability of quality office space and increased occupier interest. Although there was a growing preference for high-quality office space, Grade A offices remained in short supply. Additionally, changes in work patterns and the rise of remote working have led to an increase in demand for flexible office spaces.

Speakers also highlighted the strong demand for world-class logistics and warehousing solutions, which is driving growth in the industrial sector. The UAE holds a leading position in the GCC and ranks seventh globally in the Logistics Performance Index. Government-led initiatives such as Operation 300 Billion, UAE Industrial Strategy 2030 and Made in the UAE are expanding opportunities in manufacturing and logistics. Third-party logistics (3PL) and e-commerce are estimated to be key drivers of growth in this sector.

News Source: Khaleej Times