Dubai's Real Estate Set to Deliver 34,000 Units in 2024

Dubai's Real Estate Set to Deliver 34,000 Units in 2024

Despite a global economic slowdown, experts anticipate that the real estate market in the UAE will continue to thrive in 2024.

Dubai is projected to deliver around 34,000 units, while Abu Dhabi aims to complete approximately 8,000 units. This positive outlook is supported by robust economic foundations, government initiatives, and growing investor confidence. At a panel discussion titled "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 UAE's dynamic market. They emphasized that the real estate sector, in particular, is expected to sustain its upward trend, building upon the strong growth and high buyer demand witnessed in 2023.

James Allan, CEO of 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 that the industry will continue to perform well in 2024, even amidst inflationary challenges. Allan emphasized that the optimistic outlook and positive investment climate provide stability amid global uncertainties, further solidifying the UAE's appeal as an attractive destination for both 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 rate of growth is likely to slow down in the upcoming year.

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

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

Property Monitor, a prominent real estate technology and market intelligence provider, forecasts that Dubai's thriving residential market will see the completion of over 40,000 units in 2024, following the launch of nearly 100,000 new units in 2023. The housing sector, which experienced its largest annual price increase of 16.4 percent in over a decade last year, will continue to contribute to the robust supply pipeline expected in the coming years, according to a recent report by Property Monitor.

Speakers at the JLL panel event noted that with the growth of private and sovereign wealth, as well as increased infrastructure spending, the outlook for the real estate sector across the wider GCC region appears promising. This region is less affected by global challenges such as inflation and increases in interest rates.

"The positive sentiment and performance of various macroeconomic indicators demonstrate confidence and resilience in both the UAE and GCC markets. Dubai remains a dominant force in the region's property sector,"

stated the experts from JLL.

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

Furthermore, the 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 becoming increasingly important, and financial institutions are expanding their lending offerings for green projects.

In Dubai, there has been a rise in luxury off-plan 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 noticeable uptick in demand for office space. Landlords continued to hold a strong position in the market as rents rose due to the limited availability of quality office spaces and increased interest from occupiers. Although there was a growing preference for high-quality office spaces, Grade A offices remained scarce. Additionally, changes in work patterns and the rise of remote working led to a surge in demand for flexible office spaces.

The speakers also highlighted the robust demand for top-notch logistics and warehousing solutions, which is driving growth in the industrial sector. The UAE holds a leading position in the GCC and ranks 7th globally on the Logistics Performance Index. Government-led initiatives like Operation 300 billion, UAE Industrial Strategy 2030, and Made in the UAE are expanding opportunities in manufacturing and logistics. It is estimated that third-party logistics (3PLs) and e-commerce will be key drivers of growth in this sector.

News Source: Khaleej Times

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