Surge in Dubai and Abu Dhabi Real Estate Amidst Influx of Global Millionaires

Anticipating a remarkable year ahead: UAE real estate market gears up for unprecedented growth as investor enthusiasm surges for both mid-market and high-end properties.

The UAE’s real estate sector stands on the cusp of an extraordinary year, as investor interest in mid-range and premium real estate experiences an upswing of impressive proportions. The initial half of the year witnessed an exceptional trajectory in the residential property markets of Abu Dhabi and Dubai, as attested by a spokesperson from real estate consultancy CBRE in conversation with 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,” shared Taimur Khan, Head of Research EMEA at CBRE.

In Abu Dhabi, the total volume of real estate transactions soared by an impressive 94.1 percent year-on-year in the first half of 2023 (H1 2023), prominently driven by a staggering 160.4 percent surge in off-plan transactions, as per the findings of CBRE’s UAE Real Estate Market Outlook Mid-Year Review.

In the same context, the growth in average villa prices within Abu Dhabi has initiated a more rapid incline in annual terms. Conversely, the growth rate for apartments witnessed moderation in Q2 2023. Nonetheless, CBRE holds the expectation that this trend will shift course over the coming months.

Meanwhile, in Dubai, the overall magnitude of real estate transactions set a new benchmark in H1 2023, experiencing a notable 43.3 percent rise year-on-year. This surge in demand has in turn buttressed a greater-than-anticipated escalation in property prices.

Regarding the rental landscape, the growth rate of average rents in Dubai has displayed a pattern of moderation throughout the initial half of the year. In the case of Abu Dhabi, the rental market’s performance has stayed consistent with CBRE’s projections.

Khan highlighted, “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.”

A Global Magnet for Mid-Market Investment: CBRE’s Projections and Insights

CBRE foresees the second half of the year to wield considerable strength for both real estate markets. Khan stated, “We expect that it will surpass where we were last year in terms of the total number [of transactions], and easily so.”

He went on to elaborate, “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.”

Khan underscored the allure of the mid-market segment to international investors, foreseeing a surge in investor engagement in this sector, alongside prime real estate, which has undergone an exceptional year in the UAE.