UAE property market braces for record-breaking year as investor interest for mid-market and top-end real estate surges
The growth of Abu Dhabi and Dubai’s residential property markets have surpassed expectations during the first half of the year, a spokesperson from real estate consultancy CBRE told Arabian Business.
“We expected demand to actually slightly adjust compared to what was a very strong year last year. But actually, that hasn’t really been the case when we look at Abu Dhabi or Dubai,” said Taimur Khan, Head of Research EMEA at CBRE.
The total number of real estate transactions in Abu Dhabi increased by 94.1 percent year-on-year in the first half of 2023 (H1 2023), driven by a 160.4 percent surge in off-plan transactions, the firm’s UAE Real Estate Market Outlook Mid-Year Review revealed.
While average villa prices in Abu Dhabi have started to grow at a faster rate on an annual basis, the growth rate for apartments has moderated in Q2 2023. However, we still expect this trend to reverse over the course of the year.
In Dubai, the total volume of real estate transactions also broke records in H1 2023, up 43.3 percent year-on-year. This surge in demand has also underpinned higher than expected price growth.
On the rental front, the growth rate of average rents in Dubai has moderated in each of the first six months of the year. In Abu Dhabi, the rental market has performed as forecasted to date.
“In Dubai, we expected demand to get slightly worse, but we saw an increase of around 43 percent year-on-year and this higher growth in transactions is also meaning that we are seeing price growth increase in Dubai as well,” he told Arabian Business.
Mid-market segment to attract significant investor interest globally
CBRE projects the second half of the year’s numbers to be “fairly strong” for both real estate markets.
“We expect that it will surpass where we were last year in terms of the total number [of transactions], and easily so,” said Khan.
“We’re seeing that particularly there’s a lot of interest from all corners of the world, and in different segments of the market from the top-end to the mid-market as well. We’re seeing investors from Asia and Europe coming in so we think it’s going to surpass last year’s numbers quite comfortably.”
The mid-market segment has seen quite strong interest from international investors, he added, projecting more investor activity in the segment as well as in prime real estate which has witnessed a remarkable year in the UAE.
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