UAE real estate companies report that the real estate markets in Dubai and Abu Dhabi are proving resilient in the face of rising interest rates and inflation.
In the second quarter of 2023, Dubai’s real estate market outperformed the global competition with around 11,000 residential units, mainly apartments. Sales activities in Abu Dhabi for completed and unplanned projects reached a decade high. While only minimal rental growth was recorded in some areas due to increased supply, rents in popular communities rose at an above-average rate due to limited availability. Rental prices for apartments, villas and offices rose by 6%, 3% and 6% respectively in this quarter. Demand on the market for high-quality office space continued to increase. In the sales market, price growth in Dubai slowed with a quarterly increase of 2% for apartments, 3% for villas and 4% for offices.
In Abu Dhabi, around 1,400 apartments were added in the second quarter of 2023 and more are expected by the end of the year. First-class villa communities continued to be in high demand and rents rose by up to 10% compared to the previous year. There was great interest in office space, particularly in the A and B+ categories. A strong transaction volume was recorded for completed and unplanned projects, with end users making a significant contribution. Sales prices for completed apartments remained stable with an average annual increase of 1%, and average sales prices for villas rose by almost 2% in the quarter. High-quality villa communities continued to perform better, achieving sales price growth of almost 6%. Prime off-plan projects on Saadiyat and Yas Islands were well received with prices ranging from AED 1,500 to AED 3,800 per square meter.
