UAE real estate growth continues according to Asteco Q2 2024 report
In addition, the report noted that Abu Dhabi’s real estate market is set for continued growth in 2024, supported by government initiatives and robust economic fundamentals
According to the Asteco Q2 2024 real estate report, Dubai’s fundamentals are robust, driven by high equity in the real estate market, continued economic growth, infrastructure development and a growing population. The report also said the city’s economy and attractive lifestyle remain major draws for expatriates.
In addition, the report noted that Abu Dhabi’s real estate market is set for continued growth in 2024, supported by government initiatives and robust economic fundamentals. Meanwhile, the Northern Emirates are poised for sustained development, underpinned by strategic planning, attractive affordability, and increased investments. The Abu Dhabi market saw the delivery of around 2,400 residential units, particularly in Noya on Yas Island, Jubail Island, Masdar City, and Al Raha Beach. Several residential and mixed-use projects are currently also in the planning stages, with public launches expected throughout 2024.
In the rental sector, the market continued to record strong activity, particularly in upscale apartment and villa locations. The market also saw a steady influx of private and corporate investments, fuelling demand for high-quality office spaces, and leading to significant rental growth. Grade A offices in prime locations experienced a substantial (circa 10%) increase compared to the previous year, with robust quarterly growth ranging between 3% and 8%, especially for new contracts, the report noted.
The report indicated that in Q2 2024, the pace of new supply delivery decelerated compared to Q1 2024, with approximately 6,750 residential units completed. Project launches continued at a robust pace, encompassing a wide array of developments from single low-rise buildings and skyscrapers to expansive master-planned communities. Looking ahead, Asteco anticipates the delivery of an additional 25,000 residential units in the second half of 2024, though some may be delayed until 2025.
The office rental market continued to thrive, particularly for Grade A space, driven by demand and limited supply. The upward pressure on rents is expected to persist until new supply enters the market or business conditions change. This is attributed to a general increase in demand and in part to a significant rise in both off plan launches and newly completed developments. These new projects often feature superior quality compared to earlier ones in these areas and are priced accordingly. The off-plan property market continued to maintain remarkable momentum, with both local and international investors eagerly acquiring newly launched units, attracted by the promise of strong returns on investment in a tax-friendly environment, the firm explained.
During Q2 2024, the Northern Emirates noted an increase in tenant migration from Dubai due to several factors, such as lower rental rates, improving standards of development, enhanced infrastructure, and the adoption of more flexible and hybrid working arrangements. Asteco observed greater rental growth for ‘typical’ apartments compared to high-end properties across the Northern Emirates, the firm noted.
