According to property expert Asteco, Abu Dhabi’s residential sales market is exhibiting encouraging signals of development shortly, with a modest rising trajectory projected in the next months. Meanwhile, Dubai’s real estate market has remained resilient in the first three months.

According to Asteco’s Q1 2024 real estate research, Dubai’s robust economic performance and dedication to enhancing quality of life and drawing in competent professionals will continue to draw in a large number of expats.

The Dubai market received almost 10,000 residential units during the course of the three months, comprising 2,750 villas and 7,300 apartments.

This is a notable improvement over the previous quarter and points to a positive trend for the upcoming year. By 2024, an extra 30,000 units are anticipated to hit the market.

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Over the past three months, there has been a mixed bag of rise in rental rates. The average cost to rent an apartment or a villa has not increased much, although rental rate growth differs by community.

The report states that yearly growth rates have dropped to single digits, with apartments and villas following closely at 10% and 6%, respectively.

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In comparison to the previous quarter and the same period last year, the number of new contracts issued in Q1 2024 dropped by 4%, according to figures from the Dubai Land Department (DLD). Conversely, renewals were up 5% from quarter to quarter and 12% from year to year, with many tenants accepting rent increases that were greater than average.

In line with the rental market, average sales prices for both apartments and villas showed some variance at the community level during the first quarter of 2024, but overall they stayed fairly steady. For villas and apartments, the corresponding annual growth rates were 8% and 6%, respectively.

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Buyer tastes began to gradually change in the new year, with an increase in demand for flats in well-established areas such as Downtown Dubai, Business Bay, Jumeirah Village Circle (JVC), and Dubai Marina.

Because of things like less initial investment costs, better occupancy rates, higher rental demand, and shorter vacancy periods, apartments generally offer a higher Return on Investment (ROI). In terms of transaction value and volume, the off-plan market continued to hold a strong position.

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According to the Asteco analysis, Abu Dhabi’s residential sales market is predicted to gradually increase over the next few months, exhibiting encouraging indicators of growth in the near future.

Eight hundred residential units were completed in the Abu Dhabi market, most of them were in Al Raha Beach and other Investment Zones. The launch of Yas Canal, a brand-new mega villa project in the same neighborhood, was the most noteworthy development.

By the fourth quarter of 2027, this project should be finished, and 1,146 apartments will be delivered—exclusively to UAE citizens.

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The rental market for apartments and villas in Q1 2024 was largely constant, with demand for prime and high-end constructions being particularly strong. This led to a rise in rentals of 7% to 10% over the previous year, especially for new contracts.

The 2023–2024 increase in the cost of renting first-rate office space has persisted. Depending on the unit size and terms of payment, several developments experienced hikes of 5% to 7%.

The government’s efforts to draw in international investment have led to a rise in demand from expanding enterprises, which has resulted in a shortage of quality office space in Abu Dhabi, which has driven up rental rates.

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The number of transactions in Abu Dhabi’s sales market surged dramatically in the first quarter of 2024. There were almost 2,660 registered sales of flats and villas, a significant 17% rise over the same period previous year.

Approximately 1,840 transactions, or roughly 69% of the total, were off-plan sales, a 2% rise from the previous quarter. Around 73% of all off-plan purchases and nearly 78% of completed property transactions during this period were apartment sales.

The market’s average price for apartments sold was mostly unchanged, but there was a discernible rise in the higher and luxury segments on the islands of Yas and Saadiyat.

The average price of a villa sold increased by 1% to 3% on a quarterly basis. Nonetheless, the research states that the growth from year to year was more noteworthy, averaging 10% to 15%.

According to Asteco, the Northern Emirates market showed resilience and the potential for further expansion in Q1. The market fared exceptionally well in Q1.

The Northern Emirates had an increase in average apartment rental rates of 4% during the quarter and 9% annually; high-end properties experienced a slightly quicker growth rate than average units.

When it came to rises in rental rates, Ras Al Khaimah was leading the way, closely followed by Sharjah and Ajman.

All asset classes in the Al Ain market saw comparatively constant average rental rates. Sustained demand, mostly from domestic sources, has fueled this performance.

According to Asteco’s research, while apartment rental rates were generally consistent, there were some revisions, especially in the lower-end category that is more susceptible to price.

On the opposite end of the market, premium villas had notable yearly rental rise of up to 8%; the rate of increase varied depending on variables like condition and location, it continued.